Can a North Carolina lawyer hire a private investigator to misrepresent their identity to gather evidence before filing suit?

Plain-English summary

The opinion does not apply to government lawyers, because Comment [1] to Rule 8.4 lets a government lawyer advise investigatory personnel on action they are lawfully entitled to take. It also reaches only private lawyers who advise, direct, or supervise deceptive conduct, not lawyers who personally engage in it. The inquiry comes from a lawyer pursuing a wage-and-hour claim who wants to hire a private investigator to pose as a job applicant and test whether the employer pays its workers lawfully.

The opinion states the Rules are rules of reason and that there are instances when the use of misrepresentation does not violate Rule 8.4(a)'s prohibition on using third parties to engage in conduct involving misrepresentation, citing Rule 0.2 (Scope) and Rule 8.4(a) and (c). It points to other jurisdictions, including Arizona Op. 99-11 and Maryland Op. 2006-02, which permit "testers" who use misrepresentation to collect evidence of discrimination on the rationale that testers serve an important public policy. Citing Comment [3] to Rule 8.4, that the purpose of discipline is to protect the public, the courts, and the profession, the committee frames the issue as balancing the public's interest in investigating and stopping unlawful activity against the profession's interest in lawyer integrity and honesty.

The opinion resolves that balance with five conditions. In pursuit of a legitimate public interest, such as discrimination in housing, employment, and accommodations, patent and intellectual property infringement, or the production and sale of contaminated and harmful products, a lawyer may advise, direct, and supervise the use of misrepresentation if (1) it is in lawful efforts to obtain information on actionable violations of criminal law, civil law, or constitutional rights; (2) the lawyer's conduct is otherwise in compliance with the Rules; (3) the lawyer has a good-faith belief that there is a reasonable possibility that a violation has taken place, is taking place, or will take place in the foreseeable future; (4) the misrepresentations are limited to identity or purpose; and (5) the evidence sought is not reasonably available through other means. The opinion adds that a lawyer may not use such misrepresentation to pursue the purely personal interests of a client where there is no public-policy purpose, such as the interests of the principal in a family law matter. If the inquiring lawyer concludes each condition is satisfied, he may retain the investigator.

In practice

Under the North Carolina rules as they stood at the time of the opinion, conduct in which a private lawyer directs an investigator to misrepresent identity or purpose is permitted only when the investigation serves a legitimate public interest and all five conditions the opinion lists are satisfied; the same conduct in service of a client's purely personal interests, with no public-policy purpose, is not permitted. Per the opinion, the analysis turns on the public-interest purpose and on the five limits, the most concrete of which confine the deception to identity or purpose and require that the evidence be unavailable through other means.

The opinion's endnotes add that the lawyer may not, through an investigator, communicate with a represented person about the subject of the representation in violation of Rule 4.2(a), and they identify systematic fair-housing testing data developed for programs like Legal Aid of North Carolina's Fair Housing Project as a sufficient basis for the required good-faith belief.

Common questions

Q: Can a North Carolina lawyer hire an investigator to pose as a customer or job applicant to gather evidence?

A: Yes, in limited circumstances. The opinion permits a private lawyer to direct an investigator to misrepresent identity or purpose, but only to pursue a legitimate public interest and only if the five conditions the committee lists are met.

Q: What are the five conditions?

A: The opinion requires that the misrepresentation be (1) in lawful efforts to obtain information on actionable violations of criminal law, civil law, or constitutional rights; (2) accompanied by conduct otherwise in compliance with the Rules; (3) supported by a good-faith belief in a reasonable possibility of a past, present, or future violation; (4) limited to identity or purpose; and (5) used only where the evidence is not reasonably available through other means.

Q: Can a lawyer use these tactics in a divorce or other personal matter?

A: No. The opinion states a lawyer may not advise, direct, or supervise the use of misrepresentation to pursue the purely personal interests of a client where there is no public-policy purpose, giving a family law matter as the example.

Q: Does the opinion apply to government lawyers or to lawyers who do the deception themselves?

A: No. The opinion says it does not apply to government lawyers, citing Comment [1] to Rule 8.4, and it is limited to private lawyers who advise, direct, or supervise the deceptive conduct rather than lawyers who personally participate in it.

Q: Can the investigator contact someone who already has a lawyer?

A: No. Endnote 1 states that Rule 4.2(a) bars communicating about the subject of the representation with a represented person, and a lawyer may not violate that rule through an investigator under Rule 8.4(a).

Background and rules framework

The opinion interprets North Carolina Rule 8.4 (misconduct, the analogue of Model Rule 8.4), specifically Rule 8.4(a) (a lawyer may not violate the Rules through the acts of another) and Rule 8.4(c) (conduct involving dishonesty, fraud, deceit, or misrepresentation). It reads those provisions together with Rule 0.2 (the Scope section, which describes the Rules as rules of reason) and Comment [3] to Rule 8.4 (the purpose of professional discipline is to protect the public, the courts, and the profession).

The endnotes apply Rule 4.2(a) (communication with a represented person, the analogue of Model Rule 4.2) as an outer limit on what an investigator may do on the lawyer's behalf.

Citations and references

Rules of Professional Conduct:

• MR 8.4 / NC Rule 8.4 (misconduct; Rule 8.4(a) acting through another; Rule 8.4(c) dishonesty, fraud, deceit, misrepresentation; Comment [3])
• NC Rule 0.2 (Scope; the Rules as rules of reason)
• MR 4.2 / NC Rule 4.2(a) (communication with a represented person)

Other opinions cited:

• Ariz. State Bar Comm. on the Rules of Prof'l Conduct, Op. 99-11 (1999): a lawyer may supervise "testers" who use misrepresentation to gather evidence of discriminatory practices.
• Maryland Bar Ass'n, Op. 2006-02 (2005): same.

See also

• Alabama Bar Op. 2007-05: Pre-Litigation Investigation Using Pretexting
• Virginia Bar Op. 1765: Intelligence-Agency Lawyer and Undercover Work
• Virginia Bar Op. 1845: Covert Tactics in Unauthorized-Practice Investigations

Source

• Landing page: https://www.ncbar.gov/for-lawyers/ethics-and-governing-rules/ethics-opinions/opinions/2014-formal-ethics-opinion-9/

Original opinion text

Reproduced from the official source for research purposes. The linked source is authoritative.

Note:

This opinion does not apply to the conduct of a government lawyer. As explained in comment [1] to Rule 8.4, the prohibition in Rule 8.4(a) against knowingly assisting another to violate the Rules of Professional Conduct or violating the Rules of Professional Conduct through the acts of another does not prohibit a government lawyer from providing legal advice to investigatory personnel relative to any action such investigatory personnel are lawfully entitled to take.

In addition, this opinion is limited to private lawyers who advise, direct, or supervise conduct involving dishonesty, deceit, or misrepresentation as opposed to a lawyer who personally participates in such conduct.

Inquiry:

Attorney A was retained by Client C to investigate and, if appropriate, file a lawsuit against Client C’s former employer, E. Employer E employed Client C as a janitor and required him to work 60 hours per week. E paid Client C a salary of $400 per week. Attorney A believes that because his client’s employment was a “non-exempt position” under the North Carolina Wage and Hour Act, the payment method used by E was unlawful. Instead, E should have paid Client C at least $7.25 (minimum wage) per hour for each of the first 40 hours Client C worked per week, and at least $10.88 (time and a half) for each hour in excess of 40 (overtime) that Client C worked per week.

Prior to filing a lawsuit, Attorney A wants to retain a private investigator to investigate E’s wage payment practices. The private investigator suggests using lawful, but misleading or deceptive tactics, to obtain the information Attorney A seeks. For example, the private investigator may pose as a person interested in being hired by E in the same capacity as Client C to see if E violates the North Carolina Wage and Hour Act when compensating the investigator.

Prior to filing a lawsuit, may Attorney A retain a private investigator who will misrepresent his identity and purpose when conducting an investigation into E’s wage payment practices?

Opinion:

The Rules of Professional Conduct are rules of reason and there are instances when the use of misrepresentation does not violate Rule 8.4(a)’s prohibition on the use of third parties to engage in conduct involving misrepresentation. See Rule 0.2, Scope, and Rule 8.4(a) and (c).

Other jurisdictions have interpreted their Rules of Professional Conduct to permit lawyer supervision of investigations involving misrepresentation in circumstances similar to that set out in the instant inquiry. For example, the bars of Arizona and Maryland permit lawyers to use “testers” who employ misrepresentation to collect evidence of discriminatory practices. Ariz. State Bar Comm. on the Rules of Prof’l Conduct, Op. 99-11 (1999); Maryland Bar Ass'n, Op. 2006-02 (2005). These ethics opinions conclude that testers are necessary to prove discriminatory practices and, therefore, serve an important public policy. The State Bar of Arizona opined that it would be inconsistent with the intent of the Rules of Professional Conduct to interpret the rules to prohibit a lawyer from supervising the activity of testers. Ariz. State Bar Comm. on the Rules of Prof’l Conduct, Op. 99-11 (1999).

The objective of Rule 8.4 is set out in comment [3] to the rule: “The purpose of professional discipline for misconduct is not punishment, but to protect the public, the courts, and the legal profession.” The challenge is to balance the public’s interest in having unlawful activity fully investigated and possibly thereby stopped, with the public’s and the profession’s interest in ensuring that lawyers conduct themselves with integrity and honesty. In an attempt to balance these two important interests, we conclude that a lawyer may advise, direct, or supervise an investigation involving pretext under certain limited circumstances.

In the pursuit of a legitimate public interest such as in investigations of discrimination in housing, employment and accommodations, patent and intellectual property infringement, and the production and sale of contaminated and harmful products, a lawyer may advise, direct, and supervise the use of misrepresentation (1) in lawful efforts to obtain information on actionable violations of criminal law, civil law, or constitutional rights; (2) if the lawyer’s conduct is otherwise in compliance with the Rules of Professional Conduct;1 (3) the lawyer has a good faith belief that there is a reasonable possibility that a violation of criminal law, civil law, or constitutional rights has taken place, is taking place, or will take place in the foreseeable future;2 (4) misrepresentations are limited to identity or purpose; and (5) the evidence sought is not reasonably available through other means. A lawyer may not advise, direct, or supervise the use of misrepresentation to pursue the purely personal interests of the lawyer’s client, where there is no public policy purpose, such as the interests of the principal in a family law matter.

If Attorney A concludes that each of the above conditions is satisfied, he may retain a private investigator to look into E’s wage payment practices, which investigation may include misrepresentations as to identity and purpose.

End Notes

• Rule 4.2(a) prohibits a lawyer from communicating about the subject of the representation with a person the lawyer knows to be represented by another lawyer in the matter unless the other lawyer consents or the communication is authorized by law or court order. A lawyer may not violate this rule through the acts of another, including an investigator. Rule 8.4(a).

• Government evidence or data that supports the conclusion that random testing will uncover illegal discriminatory conduct is a sufficient basis for a lawyer’s “good faith belief” under this condition. For example, federal funding and contracts for Legal Aid of North Carolina, Inc.’s (LANC) Fair Housing Project require the performance of systematic fair housing testing to uncover patterns, practices, barriers, and other more subtle forms of unlawful housing discrimination in North Carolina. Studies and evidence developed by US Department of Housing and Urban Development confirm that systematic fair housing testing is an important tool to detect housing discrimination. A LANC lawyer may rely on such evidence to form a good faith belief that there is a reasonable possibility that a violation of fair housing law has, is, or will take place and that random audits by “testers” supervised by the lawyer will uncover such conduct.