BILL NUMBER: AB 2713 ENROLLED
BILL TEXT
PASSED THE ASSEMBLY AUGUST 25, 2004
PASSED THE SENATE AUGUST 24, 2004
AMENDED IN SENATE AUGUST 19, 2004
AMENDED IN SENATE JULY 2, 2004
AMENDED IN SENATE JUNE 16, 2004
INTRODUCED BY Assembly Member Pavley
(Principal coauthor: Assembly Member Steinberg)
(Principal coauthor: Senator Escutia)
(Coauthors: Assembly Members Hancock, Jackson, Koretz, Laird, and
Lieber)
(Coauthors: Senators Florez, Kuehl, and Romero)
FEBRUARY 20, 2004
An act to add Section 6068.1 to the Business and Professions Code,
relating to attorneys.
LEGISLATIVE COUNSEL'S DIGEST
AB 2713, Pavley. Representation of governmental organizations.
Existing law, the State Bar Act, specifies the duties of an
attorney, which include the obligation to maintain the
confidentiality of information disclosed by a client.
This bill would authorize an attorney who, in the course of
representing a governmental organization, learns of improper
governmental activity, as defined, to urge reconsideration of the
matter and to refer it to a higher authority in the organization.
The bill would also authorize the attorney, in specified
circumstances, to refer the matter to a law enforcement agency or to
another governmental agency and would exempt the attorney from
disciplinary action for making a referral of the matter.
THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:
SECTION 1. (a) The Legislature hereby finds and declares the
following:
(1) The California Rules of Professional Conduct appropriately
underscore the importance in our justice system of protecting
attorney-client confidential information. However, in the
representation of governmental organizations, circumstances may arise
where the interests of the public may justify an attorney reporting
client information that is otherwise confidential. The commission of
a crime or fraud that may justify the breach of the attorney-client
privilege covers a broad spectrum and includes, but is not limited
to, a conflict of interest in violation of Section 1090 of the
Government Code, misuse or misappropriation of public funds in
violation of Section 424 of the Penal Code, embezzlement of property
by a public official in violation of Section 504 of the Penal Code,
falsifying government records in violation of Section 6200 of the
Government Code, and conspiracy to obstruct justice in violation of
paragraph (5) of subdivision (a) of Section 182 of the Penal Code.
(2) Current law and the California Rules of Professional Conduct
do not provide adequate guidance and clarity for attorneys
representing governmental organizations to determine the
circumstances under which they may properly seek to protect the
public interest by reporting improper governmental activity to
appropriate enforcement, regulatory, and oversight bodies.
(3) Generally, the governmental organization itself is the client
of the attorney, and not any official or entity within the client
organization, notwithstanding the ability of the official or entity
to exercise exclusive power over any given subject on behalf of the
client organization. The specific governmental organization that is
the client of the attorney is defined by applicable law.
(b) The California Supreme Court did not approve amendments to the
California Rules of Professional Conduct proposed by the State Bar,
stating that the proposed modifications conflict with subdivision (e)
of Section 6068 of the Business and Professions Code. Accordingly,
the Legislature hereby finds and declares that statutory changes are
necessary to address this issue.
SEC. 2. Section 6068.1 is added to the Business and Professions
Code, to read:
6068.1. (a) If, in the course of representing a governmental
organization, an attorney learns of improper governmental activity,
the attorney may take one or both of the following actions:
(1) Urge reconsideration of the matter while explaining its likely
consequences to the organization.
(2) Refer the matter to a higher authority in the organization,
including, if warranted by the seriousness of the matter, referral to
the highest internal authority that can act on behalf of the
organization.
(b) (1) Notwithstanding subdivision (e) of Section 6068, the
attorney may refer the matter to the law enforcement agency charged
with responsibility over the matter or to any other governmental
agency or official charged with overseeing or regulating the matter
if the attorney meets one of the following conditions and all of the
requirements described in paragraph (2) are satisfied:
(A) He or she has taken both actions described in subdivision (a)
without the matter being resolved.
(B) He or she reasonably believes that taking the actions
described in paragraph (1) of subdivision (a) is not reasonable under
the circumstances and that taking the actions described in paragraph
(2) of subdivision (a) is futile.
(C) He or she reasonably believes that the highest internal
authority that can act on behalf of the organization has already,
directly or indirectly, participated in the improper governmental
activity.
(2) (A) The referral is warranted by the seriousness of the
circumstances and is not otherwise prohibited by law.
(B) The improper governmental activity constitutes the use of the
organization's official authority or influence to commit a crime or
to perpetrate fraud.
(C) Further action is required in order to prevent or rectify
substantial harm to the public interest or to the governmental
organization resulting from the improper governmental activity.
(c) An attorney's conduct in making a referral under subdivision
(b) shall not be a cause for disbarment, suspension, or other
discipline if the attorney has acted reasonably and in good faith to
determine the propriety of making a referral and to identify the
appropriate governmental agency or official as described in
subdivision (b). In addition, an attorney's conduct shall not be
cause for disbarment, suspension, or other discipline if the attorney
acted reasonably and in good faith in choosing to cooperate with the
agency or official in the execution of the oversight or regulatory
responsibilities of the agency or official regarding the referral.
Once an attorney has made the referral, this subdivision shall not
apply to any further affirmative conduct outside of the scope of
subdivision (b) or this subdivision that is initiated by the attorney
to address the improper governmental activity.
(d) An attorney may, but has no affirmative duty to, take action
pursuant to this section.
(e) As used in this section, "improper governmental activity"
means conduct by the governmental organization or by its agent that
meets one or more of the following requirements:
(1) It constitutes the use of the organization's official
authority or influence by the agent to commit a crime, fraud, or
other serious and willful violation of law.
(2) It involves the agent's willful misuse of public funds,
willful breach of fiduciary duty, or willful or corrupt misconduct in
office.
(3) It involves the agent's willful omission to perform his or her
official duty.
(f) This section shall not be construed to require that the
improper governmental activity subject to its provisions be related,
directly or indirectly, to the matter for which the attorney was
engaged as outside counsel by the governmental organization.