In United States ex rel. Holmes v. Northrop Grumman Corp., No. 1:13-cv-00085-HSO-RHW (S.D. Miss. June 3, 2015), a district court tossed the whistleblower, who was an attorney, and his case because of a series of serious ethical misconduct including the blatant violation of court orders. Some are hailing the case as a “strong warning” and a “staunch reminder to attorneys that their ethical obligations are paramount,” suggesting that the order stands for the proposition that attorneys can rarely, if ever, be whistleblowers.
However, we believe this to be an overly broad reading of the opinion. In Holmes, the district judge detailed a litany of extreme ethical violations that led to the case’s dismissal. In short, the relator/attorney did a lot wrong to lose his case.
First, he used his role as an attorney for one of Northrop’s adversaries to gain information about the case without his client’s informed consent. The court noted that this caused a “significant risk” that Holmes’s representation of his client would be “materially limited” by his personal interest in the whistleblower case.
Second, Holmes used documents that were subject to various confidential privileges and there was “no indication that Holmes would have otherwise come into possession of these documents” outside of the privileged relationship with his client. Again the court noted a lack of informed consent from the client.
Finally, Holmes filed a separate case to obtain documents that were vital to his qui tam lawsuit under the theory that his client needed the documents for an arbitration action against Northrop. He then used those documents in his whistleblower case in violation of a specific court order that held that they could only be used in the arbitration. The court noted that Holmes evidenced a “clear intent” to misuse those documents. Further, the court noted there was “no evidence in the record that Holmes ever attempted to correct [the] statements” he made to the court that were later shown to be false.
The court found this final act to be the “most serious of the ethical violations” because it involved the attorney stipulating to an order before a United States District Court only to turn around and immediately disobey the same order.
Based on the totality of the circumstances, the court dismissed Holmes and his case, finding that the improper “conduct outweighs any social interest in permitting him to continue participating as a relator.”
Despite the negative result for the attorney whistleblower in this case, we don’t think this is the end of attorneys acting as whistleblowers so long as the attorneys obtain their clients’ informed consent if it impacts their attorney client relationship and otherwise act within the guidelines of the applicable Rules of Professional Conduct. Although generally speaking, attorneys cannot be whistleblowers against their own clients, an individual is certainly not foreclosed from being a whistleblower simply by possessing a law degree. Each case must be independently evaluated.