Can a lawyer who is also a shareholder address the represented corporation's board of directors at a shareholders' meeting about a dispute?

Plain-English summary

The inquirer is a shareholder in an Alaska corporation (with its principal place of business in Washington) who has a dispute with the corporation over alleged financial irregularities, has exercised shareholder inspection rights, and has a pending complaint with the Alaska Division of Banking and Securities, but has not filed suit. Corporation counsel advised him to direct all communications about the alleged improprieties through counsel. He asked whether he could attend the annual shareholders' meeting and address the board about his disputed issues.

The committee framed its response on three assumptions: that the inquirer seeks to communicate with the board only as an individual (not as a representative of the shareholders), about matters common to all shareholders, and about matters not currently the subject of an individual dispute between him and the corporation. Quoting RPC 4.2 (no communication about the subject of a representation with a person known to be represented, absent the other lawyer's consent or legal or court authorization), the committee concluded that, given those assumptions, RPC 4.2 does not prohibit the inquirer from communicating with the board at a shareholders' meeting.

The committee cautioned, however, that a lawyer who acts pro se on a legal claim against an entity is subject to RPC 4.2 (citing In re Haley, 156 Wn.2d 324), and that a corporation's board members fall within corporate counsel's representation of the corporation for RPC 4.2 purposes (citing Wright v. Group Health, 103 Wn.2d 192). Thus the inquirer could be prohibited from communicating with board members in an attempt to address his own legal issues with the corporation.

In practice

Under this opinion, and under RPC 4.2 as it stood in 2006, the outcome turns on the capacity in which the shareholder-lawyer speaks. The opinion holds that addressing the board at a shareholders' meeting, purely as an individual shareholder on matters common to all shareholders and not on a current personal dispute, is not barred by RPC 4.2. But it holds that the same lawyer, acting pro se to advance his own legal claim against the corporation, is subject to RPC 4.2, and because board members are within corporate counsel's representation, he could be barred from contacting them about his own legal issues. The committee tied both points to Washington case law (In re Haley and Wright v. Group Health) and grounded the permission in the stated factual assumptions.

Common questions

Q: Can a shareholder who is a lawyer speak to a represented company's board at a shareholders' meeting?

A: Yes, on the committee's assumptions. The committee concluded RPC 4.2 does not bar it when the lawyer speaks only as an individual, about matters common to all shareholders, and not about a current individual dispute.

Q: Does RPC 4.2 apply to a lawyer representing himself?

A: Yes. The committee cautioned, citing In re Haley, that a lawyer acting pro se on a legal claim against an entity is subject to RPC 4.2.

Q: Are board members covered by the corporation's lawyer for RPC 4.2?

A: Yes. Citing Wright v. Group Health, the committee said a corporation's board members fall within corporate counsel's representation of the corporation for RPC 4.2 purposes.

Q: So when could the shareholder-lawyer be barred from talking to the board?

A: When he is using the contact to address his own legal claim against the corporation, rather than speaking as an ordinary shareholder on common matters.

Background and rules framework

The opinion interprets Washington RPC 4.2 (the no-contact rule; the counterpart to Model Rule 4.2), which bars communicating about the subject of a representation with a person known to be represented by another lawyer, absent that lawyer's consent or legal or court authorization. It applies the rule to a lawyer acting pro se and to communications with a represented corporation's board, relying on In re Haley and Wright v. Group Health.

Citations and references

Rules of Professional Conduct:

• Model Rule 4.2 / Washington RPC 4.2 (communication with a represented person; application to a pro se lawyer and to a corporation's board)

Cases:

• In re Haley, 156 Wn.2d 324, 126 P.3d 1262 (2006), a lawyer acting pro se on a claim against an entity is subject to RPC 4.2
• Wright v. Group Health Hospital, 103 Wn.2d 192, 691 P.2d 564 (1984), board members within corporate counsel's representation for RPC 4.2

See also

• WA Ethics Op. 2112: Contacting a Claims Adjuster
• WA Ethics Op. 1000: Contact With Represented Party
• WA Ethics Op. 1738: No-Contact Rule in a Non-Legal Job

Source

• Landing page: https://ao.wsba.org/print.aspx?ID=1571

Original opinion text

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

Advisory Opinion: 2132
Year Issued: 2006
RPC(s): RPC 4.2
Subject: May an attorney who is also a shareholder in a corporation ask questions directly of corporation`s board of directors in an open public forum

The inquirer described himself as a shareholder in an Alaska corporation with its principal place of business in Washington State (Corporation). He also states that 1) he currently has a dispute with the Corporation over alleged financial regularities, 2) he has exercised his rights as a shareholder to inspect business records, and 3) he has a pending complaint pending with the Alaska Division of Banking and Securities. He has not instituted a legal action against the Corporation.

The inquirer states that he has been advised by counsel for the Corporation that he should not initiate further contact with the Corporation about the alleged improprieties, but should make all such communications through counsel, who represents the Corporation for the purpose of such claims.

The inquirer asks whether he can attend the annual shareholders’ meeting and address the Board of Directors concerning his disputed issues.

ANALYSIS:

The Committee’s response assumes that the inquirer seeks to communicate with the Board of Directors only 1) as an individual, not as a representative of the shareholders, 2) about matters that relate to interests that are common to all shareholders of the Corporation and 3) about matters that are not currently the subject of an individual dispute between the inquirer and the Corporation.

RPC 4.2 provides that:

In representing a client, a lawyer shall not communicate about the subject of the representation with a person the lawyer knows to be represented by another lawyer in the matter, unless the lawyer has the consent of the other lawyer or is authorized to do so by law or a court order.

Given the assumptions set forth above, the Committee does not believe that RPC 4.2 prohibits the inquirer from communicating with the Board of Directors at a shareholders’ meeting. However, the Committee cautions the inquirer that a lawyer who acts in a pro se capacity with regard to a legal claim against an entity is subject to RPC 4.2. In re Haley, 156 Wn.2d 324. 333-39, 126 P.3d 1262 (2006). A corporation’s board members fall within a corporate counsel’s representation of the corporation for purposes of RPC 4.2. Wright v. Group Health, 103 Wn.2d 192, 200-02, 691 P.2d 564 (1984). Thus, the inquirer could be prohibited from communicating with members of the Board in an attempt to address his own legal issues with respect to the Corporation.