NEW JERSEY STATE BAR ASSOCIATION
New Jersey Law Center · One Constitution Square
New Brunswick, New Jersey 08901-1520
(732) 249-5000 · Fax (732) 249-2815
July 13, 2001
Timothy J. Muris, Esq.
Chairman
Federal Trade Commission
600 Pennsylvania Avenue, N.W.
Washington, D.C. 20580
Dear Chairman Muris:
The New Jersey State Bar Association (NJSBA) respectfully requests that the Federal Trade Commission reconsider its interpretation that the Gramm-Leach-Bliley Act, 15 U.S.C. §§ 6801 et seq., requires lawyers to provide individual clients with privacy notices if they provide them with certain "financial activities." Professional rules governing lawyers in New Jersey and every other state are more protective of client privacy rights than this Act. Besides imposing a burdensome, impractical and needless regulation on attorneys, such regulation would contravene the public interest by potentially undermining relationships between individuals and their attorneys in such diverse matters as tax planning and preparation, debt collection, real estate, estate planning, financial counseling, domestic relations and bankruptcy.
The professional rules in New Jersey are typical of those that pertain to lawyers throughout the country. Lawyers are strictly required to protect all information received from clients to the fullest extent, consistent with the interests of society. Any lawyer who violates this fundamental trust would be subject to disbarment or other grave sanctions. Thus, New Jersey's Rules of Professional Conduct provide in RPC 1.6:
Confidentiality of Information.
| (a) |
A lawyer shall not reveal information relating to representation of a client unless the client consents after consultation, except for disclosures that are implicitly authorized in order to carry out the representation, and except as stated in paragraphs (b) and (c). |
| (b) |
A lawyer shall reveal such information to the proper authorities, as soon as, and to the extent the lawyer reasonably believes necessary, to prevent the client |
| |
(1) |
from committing a criminal, illegal or fraudulent act that the lawyer reasonably believes is likely to result in death or substantial bodily harm or substantial injury to the financial interest or property of another; |
| |
(2) |
from committing a criminal, illegal or fraudulent act that the lawyer reasonably believes is likely to perpetrate a fraud upon a tribunal. |
| (c) |
A lawyer may reveal such information to the extent the lawyer reasonably believes necessary: |
| |
(1) |
to rectify the consequences of a client's criminal, illegal or fraudulent act in the furtherance of which the lawyer's services had been used; |
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(2) |
to establish a claim or defense on behalf of the lawyer in a controversy between the lawyer and the client, or to establish a defense to a criminal charge, civil claim or disciplinary complaint against the lawyer based upon the conduct in which the client was involved; or |
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(3) |
to comply with other law. |
| (d) |
Reasonable belief for purposes of RPC 1.6 is the belief or conclusion of a reasonable lawyer that is based upon information that has some foundation in fact and constitutes prima facie evidence of the matters referred to in subsections (b) or (c). |
A lawyer's obligation to preserve client confidences and secrets continues beyond the termination of the attorney's employment. State v. Bellucci, 81 N.J. 531, 410 A.2d 666 (1980); Davis v. Stamler, 494 F.Supp. 339, aff'd 650 F.2d 477 (D.N.J. 1980). Even in the absence of word from the client, the attorney must claim the privilege unless otherwise instructed by the client. Advisory Opinion No. 544 of New Jersey Advisory Committee on Professional Ethics, 103 N.J. 399, 511 A.2d 609 (1986).
Courts have held that this obligation of confidentiality protects the client's privacy in matters that extend far beyond the protection of confidential information so as to assure those who seek legal advice that their secrets and confidences will remain with the attorney, thus encouraging an atmosphere of trust that is needed so that the attorney may become fully informed of the client's circumstances. Host Marriott Corp. v. Fast Food Operators, Inc., 891 F.Supp. 1002 (D.N.J. 1995).
These attorney disciplinary rules that are already in place are clearly no less protective of the client than the privacy provisions of Gramm-Leach-Bliley, which was intended to impose privacy notices on entities that were not subject to these strict privacy rules. Therefore, these superfluous privacy notices by attorneys to their clients would do nothing other than raise unfounded client doubts and confusion concerning their pre-existing right to privacy in their dealings with counsel while imposing unjustified burdens and costs on lawyers, including solo practitioners and other small firms, who would be forced to divert some attention away from the client's genuine interests to perform a useless act.
In short, Gramm-Leach-Bliley's application to lawyers is unnecessary, would provide no benefit to the client or the public and would result in unnecessary confusion and expense. For these reasons, lawyers should be exempted from application of the Act.
Please contact us if we can provide any further information that might assist the Commission. Thank you for your consideration.
Respectfully yours,
Daniel M. Waldman, Esq.
President
| cc: |
Hon. John Ashcroft
Hon. Jon S. Corzine
Hon. Robert G. Torricelli
New Jersey Members of the House of Representatives
Martha W. Barnett -- President, American Bar Association
Robert E. Hirshon -- President-Elect, American Bar Association
Robert A. Stein - Executive Director, American Bar Association
Richard J. Badolato, NJSBA President-Elect
Harold L. Rubenstein, NJSBA Executive Director
Raymond A. Noble, NJSBA Legal Counsel
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