Yes, it was okay for the lawyer to share the secret information. The rules for lawyers have a special exception for 'self-defense.' Goldberg was facing a huge lawsuit that could have ruined his career and cost him millions. Sharing the report he already gave the government was a fair and necessary way to prove he had tried to do the right thing from the beginning. Since Goldberg's actions were allowed, the investors' lawyers who received the information did nothing wrong, and they should not be kicked off the case.

The court said Goldberg was right to share the information because it was necessary to defend himself. The court explained that lawyers are allowed to do this and it doesn't mean they're breaking the rules about keeping client secrets. 

The court also said that just because Goldberg worked for Empire and knew some things about them, it doesn't automatically mean he would share their secrets in a bad way.

The court decided that the lawyers suing Empire were okay to keep working with Goldberg. The lower court's decision to kick out those lawyers and cancel the lawsuit was wrong, so the higher court reversed that part. But Goldberg still can't act as a lawyer or share any more secret info in any lawsuit about this situation, unless it's part of the official court process.

—recognizing `that a lawyer may reveal confidences or secrets necessary to defend himself against `an accusation of wrongful conduct

Counsel is allowed to disclose the confidences and secrets of his client in order to defend himself against the claims of third persons.

There are few precedents that resolve this question, but two cases that received considerable publicity during the 1970s suggest that under certain circumstances the lawyer does indeed have a duty to speak out, or at least will not be condemned for doing so

The Court stated that "[t] here is no question that Friend [the attorney] would have the right to introduce in evidence such communications [made during the preparations] in his own defense in the criminal trial

—attorney-client privilege inapplicable where attorney deposes as to own noninvolvement in alleged securities fraud

The court held that by making these disclosures, the attorney was not in breach of Canons 4 and 9 of the ABA CODE OF PROFESSIONAL RESPONSIBILITY, because under Disciplinary Rule 4-101 he was entitled to reveal

In the post-argument briefing, Borges contended that even if Placeres was entitled to use confidential or secret information to defend himself, his actions went beyond the scope of the defense exception because his statements and submissions were not necessary to defend against Borges's accusations

—construed DR 4-101 (C)(4) as allowing an attorney to reveal privileged information when necessary to defend himself in a lawsuit

Under these circumstances Goldberg had the right to make an appropriate disclosure with respect to his role in the public offering

This introduction of accusatory adversity between Qualcomm and its retained counsel regarding the issue of assessing responsibility for the failure of discovery changes the factual basis which supported the court' s earlier order denying the self-defense exception to Qualcomm' s attorney-client privilege.

No. An attorney does not violate the ethical duty of confidentiality by revealing privileged information when necessary for self-defense. The Code of Professional Responsibility, specifically DR 4-101(C)(4), provides an exception to the general rule of confidentiality, allowing a lawyer to reveal confidences or secrets necessary to defend against 'an accusation of wrongful conduct.' Goldberg was named as a defendant in a serious securities fraud case, facing substantial financial liability and reputational harm. His disclosure of the SEC affidavit to the plaintiffs' counsel was a reasonable and necessary step to substantiate his non-involvement and defend himself. Because Goldberg's actions were ethically permissible under this self-defense exception, his disclosure did not 'taint' the plaintiffs' counsel, the Bernson firm. Therefore, the disqualification of the Bernson firm was an error.

The court held that Goldberg was entitled to reveal confidences or secrets necessary to defend himself against accusations of wrongful conduct. The disclosure did not breach Canons 4 and 9 of the ABA Code of Professional Responsibility because it fell within the scope of the defense exception provided by Disciplinary Rule 4-101(C)(4). 

The court emphasized that an attorney-client privilege is inapplicable where an attorney deposes as to their own noninvolvement in alleged securities fraud. The District Court's presumption that Goldberg would violate client confidences simply because he had access to relevant information was not applicable in this case. 

The relationship between Goldberg and the Bernson firm did not violate ethical canons, and there was no basis for disqualifying the Bernson firm or dismissing the complaint. The orders prohibiting Goldberg from acting as a party or attorney in any action arising out of the facts alleged, or from disclosing material information except on discovery or at trial, were affirmed. However, the order dismissing the action without prejudice and enjoining the Bernson firm from acting as counsel for plaintiffs was reversed.

Meyerhofer v. Empire Fire and Marine Ins. Co.

Case Podcast

Rule of Law:

The Legal Principle

Facts:

Procedural Posture:

How It Got Here

Issue:

Legal Question at Stake

Opinions:

Majority, Concurrences & Dissents

Analysis:

Why This Case Matters

Gunnerbot