Ethics Opinion

Opinion No. 80-3

March 1980

Summary: In the course of arbitration before a non-lawyer arbitrator, an attorney specifically relied upon a line of federal cases which, after the filing of a brief but before a conclusion to the arbitration, was effectively overruled by a decision of the Supreme Court. The attorney must disclose the existence of that decision to the arbitrator regardless of opposing counsel's and the client's sentiments concerning disclosure and despite the fact that the matter in arbitration is arguably distinguishable on its facts from the Supreme Court case.

Facts: Attorney A represents a client which is party to arbitration before a non-lawyer arbitrator. Following an initial hearing, A submitted a brief advocating a certain proposition of law and citing a line of federal cases supporting that proposition.
Subsequent to the filing of briefs, the arbitrator requested that further evidence be offered on the issue of damages. Shortly thereafter, the United States Supreme Court issued a decision which, although arguably distinguishable on its facts from the matter of arbitration, implicitly overruled the federal cases relied upon in A's brief. The evidentiary hearing on damages has not as yet been held, and neither the arbitrator nor opposing counsel has raised the question of the applicability of the recent Supreme Court decision. Attorney A asks:
(1) Is Attorney A required to bring the Supreme Court decision to the arbitrator's attention where a) the case is pending before an arbitrator rather than a court, b) the arbitrator is a non-lawyer whose principal duty is to make findings of fact, and c) the initial hearing was held and briefs filed prior to issuance of the Supreme Court decision?
(2) If disclosure of the Supreme Court decision is otherwise required, is it appropriate to consult with opposing counsel and, if agreeable, to permit the arbitrator to issue a ruling without knowledge of the new precedent?
(3) If the client objects to disclosure, may Attorney A withdraw from the case or otherwise fail to make disclosure to the arbitrator?

Discussion: DR 7-106(B)(1) requires that, "In presenting a matter to a tribunal, a lawyer shall disclose legal authority in the controlling jurisdiction known to him to be directly adverse to the position of his client and which is not disclosed by opposing counsel." We are of the opinion that this Disciplinary Rule requires disclosure in this case.
The fact that the case is pending before a non-lawyer arbitrator does not diminish A's duty to disclose. An arbitrator is a "tribunal" whose primary function is to resolve legal disputes. Although the Supreme Court decision was not issued until after A submitted a brief, A's duty of disclosure is ongoing until the arbitrator makes a final ruling. As noted, the arbitrator has asked for additional evidence and has not rendered his ultimate decision.
In our opinion, disclosure to the arbitrator is mandatory irrespective of opposing counsel's sentiments. The obligation to disclose derives from a lawyer's responsibility to our system of justice, which is different from, but not inconsistent with, the lawyer's responsibility to a client. As noted in EC 7-23,
The complexity of law often makes it difficult for a tribunal to be fully informed unless the pertinent law is presented by the lawyers in the cause. A tribunal that is fully informed on the applicable law is better able to make a fair and accurate determination of the matter before it. The adversary system contemplates that each lawyer will present and argue the existing law in the light most favorable to his client. Where a lawyer knows of legal authority in the controlling jurisdiction directly adverse to the position of his client, he should inform the tribunal of its existence unless his adversary has done so; but, having made such a disclosure, he may challenge its soundness in whole or in part. See ABA Opinion 146 (1935).
This duty is to the tribunal, not the client. Notwithstanding any protestations by the client against disclosure or any specific request that she withdraw from the case, A must fulfill her obligation by advising the arbitrator of the existence of the recent Supreme Court decision, even if the attorney withdraws.
Although the case in arbitration may be factually distinguishable from the Supreme Court case, such a distinction would not relieve A of her duty of disclosure. As the Committee on Professional Ethics of the American Bar Association has stated,
We would not confine the Opinion to "controlling authorities"--i.e., those decisive of the pending case--but in accordance with the tests hereafter suggested, would apply it to a decision directly adverse to any proposition of law on which the lawyer expressly relies, which would reasonably be considered important by the judge sitting on the case.
The test in every case should be: Is the decision which opposing counsel has overlooked one which the court should clearly consider in deciding the case? Would a reasonable judge properly feel that a lawyer who advanced, as the law, a proposition adverse to the undisclosed decision was lacking in candor and fairness to him? Might the judge consider himself misled by an implied representation that the lawyer knew of no adverse authority?
ABA Opinion 280 (1949).

Permission to publish granted by the Board of Delegates on April 9, 1980.
As stated in the Rules of the Committee on Professional Ethics, this advice is that of a committee without official governmental status.