In Re Complaint as to the Conduct of Ellis , 356 Or. 691 ( 2015 )

No. 4 February 20, 2015 691
IN THE SUPREME COURT OF THE
STATE OF OREGON
In re Complaint as to the Conduct of
BARNES H. ELLIS,
Accused.
(OSB No. 09-54; SC S061385)
In re Complaint as to the Conduct of
LOIS O. ROSENBAUM,
Accused.
(OSB No. 09-55; SC S061385)
On review of the decision of the trial panel of the
Disciplinary Board.*
Argued and submitted March 4, 2014, at Lewis and Clark
Law School, Portland, Oregon.
W. Michael Gillette, Schwabe Williamson & Wyatt PC,
Portland, argued the cause and filed the briefs for the
Accuseds.
Mary A. Cooper, Assistant Disciplinary Counsel, Tigard,
argued the cause and filed the brief for the Oregon State
Bar.
Before Balmer, Chief Justice, and Walters, Linder,
Landau, Brewer, and Baldwin, Justices.**
PER CURIAM
The amended complaints are dismissed.
______________
**  Trial Panel Opinion May 7, 2013.
**  Kistler, J., did not participate in the consideration or decision of this case.
692 In re Ellis / Rosenbaum
The Oregon State Bar charged the accuseds with violating multiple provi-
sions of the former Code of Professional Responsibility—arising from their repre-
sentation of a public company and several company directors, officers, and man-
agers in various proceedings over several years—including former DR 5-105(C)
(waivable former-client conflicts with insufficient disclosure); former DR 5-105(E)
(nonwaivable current-client conflicts and waivable current-client conflicts with
insufficient disclosure); and former DR 1-102(A)(3) (misrepresentation by omis-
sion). Held: (1) The Bar did not prove by clear and convincing evidence that, at the
outset of an investigation by the Securities and Exchange Commission (SEC), the
interests of the company and the individual clients were adverse under former
DR 5-105(A)(2); the Bar therefore did not prove the existence of a current-client
likely conflict of interest under former DR 5-105(E); (2) The record does not show
that the clients’ interests were adverse during the SEC investigation, including
during the Wells phase (in which the SEC notified several clients of its intent
to pursue civil enforcement actions against them), and therefore did not prove
a current-client likely conflict under former DR 5-105(E); (3) No actual conflict
of interest existed between the company and the individual clients during the
Wells phase under former DR 5-105(A)(1) and former DR 5-105(E); (4) Ellis’s sub-
sequent representation of the company’s general counsel in a lawyer disciplinary
matter did not involve the same or significantly related matter as the SEC pro-
ceeding under former DR 5-105(C)(1), and, therefore, no former-client likely con-
flict existed under former DR 5-105(C); (5) Assuming that, in a limited represen-
tation of the company during a subsequent Department of Justice investigation,
a likely conflict of interest existed between the company and former clients from
the SEC representation, the accuseds sufficiently disclosed that conflict to their
former clients, so as to obtain their consent to the limited representation; and (6)
the Bar did not prove by clear and convincing evidence that the accuseds engaged
in misrepresentation by omission under former DR 1-102(A)(3).
The amended complaints are dismissed.
Cite as 356 691 (2015) 693
PER CURIAM
This lawyer disciplinary proceeding involves sev-
eral allegations under the former Code of Professional
Responsibility.1 The accuseds (also individually referred to
as Ellis or Rosenbaum in this opinion) represented a pub-
lic company involved in various protracted proceedings over
several years and also represented some company directors,
officers, and managers during some of those same proceed-
ings. The Bar charged the accuseds in separate complaints
with multiple violations of several former Disciplinary
Rules, including former DR 5-105(C) (waivable former-client
conflicts with insufficient disclosure); former DR 5-105(E)
(nonwaivable current-client conflicts and waivable current-
client conflicts with insufficient disclosure); and former DR
1-102(A)(3) (misrepresentation by omission). A trial panel of
the Disciplinary Board concluded that, although the Bar had
not proved most of the charged violations, it did sufficiently
prove that some client conflicts of interest had existed, that
the accuseds had made insufficient disclosures as to those
conflicts, and that the accuseds had made related misrep-
resentations by omission in a particular conflict disclosure
letter. The panel determined that a public reprimand was
the appropriate sanction. The accuseds sought review as to
all allegations that the panel determined that the Bar had
proved, and the Bar sought review as to some additional
allegations that the panel determined had not been proved.
For the reasons explained below, we dismiss the amended
complaints.
I. FACTS
We review the record de novo. Bar Rule of Procedure
(BR) 10.6. The Bar must prove its allegations by clear and
convincing evidence. BR 5.2. “Clear and convincing evi-
dence” means that “the truth of the facts asserted is highly
probable.” In re Phinney, 354 Or 329, 330, 311 P3d 517 (2013)
(internal quotation marks omitted). We set out a general fac-
tual summary below and discuss later in this opinion addi-
tional facts that relate to particular issues on review. We
1
The Oregon Rules of Professional Conduct replaced the former Oregon Code
of Professional Responsibility effective January 1, 2005. In re Balocca, 342 Or
279, 281 n 1, 151 P3d 154 (2007).
694 In re Ellis / Rosenbaum
draw all facts from the testimony and record before the trial
panel, and from public court records in related proceedings.2
A.  Company Background, Accounting Issues, and Class
Action Litigation
FLIR Systems, Inc. (FLIR) is a publicly traded
Portland, Oregon, company that manufactures and sells
thermal imaging equipment and broadcast camera systems,
including to governmental entities. In early 2000, key FLIR
directors, officers, and managers included Daltry (Board of
Directors Chair), Wynne (board member), Stringer (President
and Chief Executive Officer (CEO)), Samper (Chief Financial
Officer (CFO)), Martin (Vice President of Sales (Worldwide)),
Fitzhenry (General Counsel), and Eagleburger (Director of
Sales Operations and Senior Vice President for Sales and
Marketing). As CFO, Samper was responsible for FLIR’s
accounting and preparation of its financial statements.
As the 1990s ended, FLIR’s corporate accounting
grew more complicated, in part due to recent mergers and
acquisitions, and installation of a new enterprise reporting
system. In 1999, FLIR had difficulty completing its financial
statements on time. At a February 2000 Board of Directors
meeting, Samper reported that FLIR’s financial statements
again would not be prepared on time. By that point, at least
some board members began to doubt the competency of
management, including Samper’s ability to serve as CFO.
Samper resigned shortly thereafter.
FLIR then discovered several accounting errors,
including improperly claimed revenue in 1998 and 1999
for several transactions that appeared to be without suffi-
cient foundation.3 As a result of that review, FLIR decided
2
We take judicial notice of additional facts drawn from judicial opinions and
court dockets in a related criminal case prosecuted in the United States District
Court, District of Oregon, and appealed to the Ninth Circuit. See In re Fitzhenry,
343 Or 86, 109 n 17, 162 P3d 260 (2007) (taking judicial notice of fact in public
record).
3
In general, the accounting issues concerned FLIR’s “revenue recognition”
practices—that is, the point in time at which FLIR could confirm with cer-
tainty that it could include revenue derived from a particular transaction in its
financial statements. Several transactions later identified as problematic had
involved revenue recognized either prematurely or without sufficient supporting
documentation.
Cite as 356 691 (2015) 695
to restate certain 1998 and 1999 financial statements pre-
viously filed with the Securities and Exchange Commission
(SEC). In doing so, FLIR’s independent auditor instructed
FLIR to apply retroactively to the past 1998 and 1999
transactions a new SEC directive, which dictated a delay
as to when certain revenue could be recognized in a com-
pany’s financial statements. The underlying restatement
calculations, combined with retroactive application of the
new directive, ultimately caused a notable drop in FLIR’s
reported revenue for the identified time frame.
FLIR publicly announced its intent to restate.
FLIR’s stock price dropped, and, in early March 2000,
several shareholders filed class action securities litigation
against FLIR, Stringer, Samper, and eventually Daltry.
Later in March 2000, FLIR retained the accuseds,
both partners at Stoel Rives LLP, in the class action litiga-
tion, and it informed Stringer and Samper that it would pay
for their representation by the accuseds or other counsel.
The accuseds sent engagement letters to FLIR, Stringer,
and Samper, stating that a unified defense was advan-
tageous and that they did not anticipate that any conflict
would arise, but that each individual defendant might
wish to consult with independent counsel for monitoring
purposes; the letter also recommended consultation before
consenting to the joint representation. Stringer declined
and retained outside counsel. Samper already had retained
outside counsel, Glade and Kaner, but decided in consulting
with them to agree to have the accuseds serve as co-counsel.
Glade accepted the joint representation on Samper’s behalf,
noting that—in the unlikely event that an actual conflict
arose—Samper reserved his rights regarding his consent to
the accuseds’ continued representation of FLIR. After Daltry
became a defendant in the class action, he also agreed to the
joint representation, and he signed a similar consent letter.
Fitzhenry consented on FLIR’s behalf. When the accuseds
began representing FLIR, Daltry, and Samper in the class
action, they understood FLIR’s accounting issues to be the
result of possible management competency issues and an
overworked and underesourced accounting staff, but not
fraudulent actions by any FLIR officer or manager.
696 In re Ellis / Rosenbaum
FLIR ultimately filed three SEC restatements
between April 2000 and March 2001. The class action litiga-
tion eventually settled in April 2001, before discovery, with
payment by both FLIR’s insurer and FLIR. No allegations
in this proceeding concern the class action litigation.
At about the time that FLIR retained the accuseds,
FLIR’s board appointed a special committee, which included
Wynne, to examine more closely the 1998 and 1999 finan-
cial misstatements and underlying accounting problems. In
working with a prospective new independent auditor, the
committee determined that it should assess the integrity of
current management, which at that time included Daltry
and Stringer (but not Samper, who had resigned, although
the board had approved retaining him as an independent
consultant to assist with the restatements). The commit-
tee determined that Stringer had engaged in misrepresen-
tations, and the board later decided that he should resign.
Stringer was placed on administrative leave in May 2000
and later terminated; Daltry also resigned. By then, Wynne
had come to question Stringer’s integrity, but not Samper’s;
instead, he continued to view Samper as having competency
issues only, and he did not think at this time that FLIR’s
management had engaged in any fraud.
B.  SEC Investigation
Meanwhile, the SEC had begun investigating
FLIR’s accounting, arising from the same general facts and
issues alleged in the class actions. The SEC began issu-
ing subpoenas to FLIR officers, managers, and employees
in late June 2000. At FLIR’s request, the accuseds’ joint
representation—initially formed for the class action litigation—
expanded to include any current or former FLIR officer,
manager, or employee who received an SEC subpoena
and who consented to be included in the joint representa-
tion. The accuseds continued their joint representation of
FLIR, Daltry (for purposes of his SEC interview only), and
Samper (who also continued to be separately represented
by Glade and Kaner); they also began representing Wynne,
Fitzhenry, and Eagleburger for purposes of the SEC investi-
gation. The accuseds ultimately represented about 35 to 40
Cite as 356 691 (2015) 697
individuals, slightly more than half the witnesses that the
SEC examined.
Although the accuseds represented many individu-
als in the SEC investigation, they sent only eight engagement
letters, directed to the individual clients who they thought
had the greatest potential for future possible conflicts,
including members of the board, Daltry, and Eagleburger.
Those letters requested consent to the joint representation
by using similar wording as the earlier class action letters;
they did not include any new wording relating to the SEC
investigation. The accuseds did not send a letter to Samper,
because he only recently had signed a similar letter in the
class action involving the same facts. For his part, Glade
did not necessarily expect the accuseds to send a separate
engagement letter to Samper, because he assumed that the
SEC representation would proceed in the same fashion as
the class action litigation—that is, he and Kaner would
remain knowledgeable so as to provide independent advice
to Samper and be available to take over responsibility for
him as necessary.4 The accuseds agreed with each other to
watch for emerging conflicts between their clients.
The joint representation strategy in the SEC inves-
tigation was purposeful. According to the testimony of sev-
eral witnesses before the trial panel, rules governing SEC
investigations limit information available to subject compa-
nies and witnesses, while maximizing the SEC’s ability to
acquire information. A lawyer is permitted to attend a wit-
ness interview only if representing the witness, and the abil-
ity to examine transcripts and exhibits shown to witnesses
during interviews is similarly limited. Joint representation
therefore permits the company’s attorneys to act as a central
clearinghouse to obtain, consolidate, and disseminate mate-
rial information—such as subpoenaed documents and the
content of other witness interviews—to the joint clients, so
as to maximize the amount of information flowing to all rep-
resented individuals. That global collection of information,
in turn, helps the company and all involved individuals to
4
The evidence conflicts as to whether the accuseds sent a separate SEC
engagement letter to Fitzhenry. Rosenbaum thought that they had sent him such
a letter, but Ellis recalled that they had not, because they had no expectation that
the SEC investigation posed any risk to him.
698 In re Ellis / Rosenbaum
clarify the nature and focus of the investigation, and to pro-
vide useful information to the SEC. Also, unless the nature
of the investigation lends itself to blame-shifting—such as
cases involving insider trading, embezzlement, or obstruc-
tion of justice—the interests of the company and the vari-
ous witnesses tend to be aligned during the investigation
phase, because both the company and the witnesses seek to
provide the SEC with truthful information so as to under-
stand more fully the scope and direction of the investigation,
and to ameliorate the need for any continued investigation.
Joint representation therefore is a common practice during
the SEC investigation phase, when appropriate under the
circumstances. As part of a joint representation, it also is
common for some individual witnesses to have their own,
independent lawyers, who monitor the proceedings to eval-
uate whether any conflict arises and who later may serve as
lead counsel for their clients if needed.
During the SEC investigation, subpoenaed wit-
nesses typically sent requested documents to Fitzhenry, and
he sent them to the accuseds. The accuseds maintained all
the documents in a room at Stoel Rives in part for SEC staff
review; if SEC staff then marked a document for produc-
tion, Stoel Rives would catalogue the document in a FLIR
database and produce it to the SEC. Also as part of the
joint representation, either Ellis or, more often, Rosenbaum
attended all their clients’ SEC interviews. Rosenbaum took
extensive notes during the interviews that she attended,
and she provided to individual witness clients or the law-
yers of represented witness clients written summaries of
all information that she learned during the interviews that
was relevant to that client. The accuseds also provided sev-
eral interview transcripts to their individual clients or their
lawyers.
Part of the SEC’s investigation explored Samper’s
involvement, as CFO, in FLIR’s accounting problems that had
prompted the restatements. Either Glade and Rosenbaum
or Kaner and Rosenbaum attended all Samper’s SEC inter-
views, and Rosenbaum provided to Glade and Kaner com-
prehensive written summaries of all other witness testi-
mony and other documentation that, in her judgment, was
Cite as 356 691 (2015) 699
material to Samper’s involvement.5 The accuseds, Glade,
and Kaner continuously conferred through the course of the
SEC investigation regarding the transactions at issue and
the SEC’s inquiries touching on Samper. For example, early
in the investigation, a FLIR employee, Chambers, stated
that Samper had directed the destruction of a document that
she had created to track inventory. Rosenbaum, Glade, and
Kaner thereafter provided information to the SEC, through
Samper, showing that Chambers did not have a full under-
standing of the situation and that the destruction request
had been appropriate. By the later part of 2001, Glade and
Kaner continued to think that Samper did not have any con-
flicting interest with FLIR of which the accuseds would have
been aware,6 and they continued to think that Samper’s and
FLIR’s interests aligned.
The SEC focused on numerous specific transac-
tions during its investigation, including a $4.6 million 1999
transaction—the “Swedish Drop Shipment”—that had
prompted FLIR’s second SEC restatement. Samper had men-
tioned that transaction to the SEC, and the SEC questioned
both Samper and Stringer about its underlying entries.
Samper told the SEC that Stringer had directed him to
make certain entries and therefore he had done so, but FLIR
later changed those entries in its second restatement.
Also during the SEC interviews, several of the
accuseds’ individual clients offered statements that argu-
ably could be construed as unfavorable to other clients,
particularly Samper. The accuseds continued to evaluate
whether any conflict among various clients had arisen,
but they determined that their clients’ interests remained
5
The record shows that Rosenbaum sent Glade and Kaner a significant
volume of documentation and also provided their law firm with a copy of Stoel
Rives’s FLIR database.
6
Samper and FLIR had a dispute about the terms of an earlier agreement
between them, concerning Samper’s exercise of stock options following termina-
tion of employment. That dispute prompted Samper to think that his relationship
with FLIR was becoming more adverse through the course of the SEC investiga-
tion. The accuseds were not aware of that issue, however; indeed, Glade testified
that he did not involve Rosenbaum in any options dispute discussion because he
did not want to taint her relationship with Samper or FLIR for purposes of the
SEC investigation. Glade further testified that Samper ultimately decided to con-
tinue the joint representation notwithstanding the options dispute.
700 In re Ellis / Rosenbaum
aligned and therefore made no additional disclosures during
the investigation phase.7
As the SEC investigation progressed, Wynne
worked with a new FLIR controller, Muessle, who had
reviewed multiple earlier recorded transactions and deter-
mined that many should not have been entered due to insuf-
ficient supporting documentation. By spring 2001, Wynne
concluded that FLIR’s former management had engaged in
securities fraud. As to Samper specifically, Wynne concluded
that Samper had made entries and submitted financial
statements that contained figures manipulated as a result
of fraud, which, in Wynne’s view, satisfied the definition of
securities fraud, even if Samper himself had not manipu-
lated any figures. The accuseds were unaware until several
years later that Wynne had reached that general conclusion
about Samper.
Meanwhile, in July 2001, Stringer sued FLIR for
wrongful termination, and the accuseds’ firm, Stoel Rives,
represented FLIR in that action. The complaint eventually
was dismissed with prejudice in 2003.
The SEC investigation effectively concluded near
the end of 2001. Typically, at the close of an SEC investi-
gation phase, the SEC decides whether to send a “Wells
Notice” to the company or other individuals. A Wells Notice
is an official notification that outlines the SEC’s potential
case against the recipient, laying the groundwork for a pos-
sible civil enforcement action. During the “Wells phase,”
each Wells Notice recipient typically meets separately with
the SEC to discuss the SEC’s theory of its case against that
recipient. A Wells Notice recipient then may file a “Wells
Submission” that offers a specific response to the Wells
Notice. Often, the Wells process frames ensuing settlement
negotiations between the SEC and a Wells Notice recipient.
7
The SEC interviewed many other witnesses who were not the accuseds’
clients, including Stringer, a previous FLIR controller, the previous and current
FLIR auditors, and a previous FLIR Vice President of Manufacturing, who some
inside FLIR suspected had initiated the SEC investigation. More than half the
SEC’s interview time in its investigation was devoted to witnesses who were not
the accuseds’ clients. Under the SEC’s investigation rules, the accuseds were not
privy to any information provided by witnesses whom they did not represent and
therefore did not know the extent to which those witnesses might have testified
unfavorably as to Samper or their other clients.
Cite as 356 691 (2015) 701
In February 2002, the SEC issued Wells Notices to
FLIR and Samper, indicating its intention to recommend sep-
arate civil enforcement actions against them. The SEC also
issued similar Wells Notices to Fitzhenry and Eagleburger,8
which the accuseds had not anticipated, and to others who
were not the accuseds’ clients, including Stringer; Martin
(FLIR’s former Vice President of Sales (Worldwide), who
effectively had been terminated in spring 2000); and FLIR’s
previous auditor. Ellis immediately advised Fitzhenry and
Eagleburger to obtain independent counsel, and they both
did so. Wilson began representing Fitzhenry, and Neil began
representing Eagleburger; as to both clients, the accuseds
remained available as supporting co-counsel. As to Samper,
Glade and Kaner took the lead in his representation during
the Wells phase, with the accuseds moving to a supporting
co-counsel role as needed. The accuseds continued to repre-
sent FLIR.
In early March 2002, FLIR had its Wells meeting
with the SEC, which included Wynne, the accuseds, and
FLIR’s then-current CEO, Lewis. At that meeting, FLIR
emphasized its remediation efforts. Also at the meeting, SEC
staff questioned both Samper’s and Fitzhenry’s truthfulness,
based on their investigation. After the meeting, Rosenbaum
reported the general discussion to Glade and Kaner, and
also to Neil, once he began representing Eagleburger. Among
other things, Rosenbaum told Kaner that the SEC thought
that Samper had not been forthcoming.
Samper’s Wells meeting was scheduled for the fol-
lowing week. Before that meeting, Ellis left a long voicemail
message for Glade that emphasized the SEC’s strident tone
in FLIR’s Wells meeting; emphasized the SEC’s certitude
that wrongdoing had occurred, including by Samper; and
recommended possible approaches for Samper. Glade and
Kaner—but not the accuseds—attended Samper’s Wells
meeting. Even with Ellis’s forewarning, they were shocked
by the SEC’s tone and negative view of Samper. In the
course of discussing its case against Samper, the SEC told
Glade and Kaner that Rosenbaum had represented most of
8
The SEC issued Eagleburger’s Wells Notice in mid-March 2002, after FLIR
filed its Wells Submission, as described later in the text.
702 In re Ellis / Rosenbaum
the witnesses who purportedly had implicated Samper in
problematic transactions.
Rosenbaum was out of the country during Samper’s
Wells meeting, but she e-mailed Glade afterwards to ask how
it had gone. Glade responded that it was “what you would
expect” and had involved familiar transactions, that the
SEC was relying on FLIR employees who did not have first-
hand knowledge of key events, and that the SEC thought
that Samper had been disingenuous at best. Rosenbaum
and Glade then exchanged thoughts about Samper prepar-
ing a Wells Submission; Glade’s side of the communication
acknowledged that Rosenbaum had been supplying him
with her witness notes all along, suggesting that he already
had been privy to statements about Samper from Stoel
Rives-represented witnesses on which the SEC had relied in
Samper’s Wells meeting.
The accuseds, Wynne, and Fitzhenry drafted
FLIR’s Wells Submission, filed in March 2002. FLIR’s
Wells Submission purposefully focused on current manage-
ment’s remediation efforts since discovery of the 1998 and
1999 accounting issues. FLIR emphasized a near-complete
turnover of management and auditors, and its expansion
and strengthening of its accounting personnel and con-
trols, including removal of senior management responsible
for FLIR’s troubles. FLIR described the earlier account-
ing issues as “errors” or “problems,” not “fraud.” FLIR also
stated that, to the extent that any wrongdoing might have
occurred, FLIR understood that the SEC was “pursuing
fraud claims against one or more individuals who may
have been responsible.” In crafting its Wells Submission,
FLIR intended to refer to only Stringer and Martin as the
senior management who had been “removed” and against
whom the SEC was “pursuing” further action. FLIR’s Wells
Submission did not expressly take any position or make
any characterization about Samper, Daltry, or Eagleburger,
although it did comment favorably on Samper’s coopera-
tion with the SEC; it also included an expressly favorable
statement about Fitzhenry, who was the only member of the
current senior management team who had worked at FLIR
in 1998 and 1999, and so the drafters thought it important
to offer a positive comment about his ongoing employment.
Cite as 356 691 (2015) 703
At the time that FLIR prepared its Wells Submission, the
accuseds had concluded that Stringer and Martin—but not
Samper or any of their other clients—had acted fraudulently
in relation to FLIR’s 1998 and 1999 accounting errors.
Upon receipt of FLIR’s Wells Submission, Glade
reviewed it and construed it as inferentially referring to
Samper as a bad actor. Ellis, however, assured Glade that
FLIR had not intended to identify Samper as a culpable
actor; instead, FLIR’s Wells Submission focused on forward-
looking remediation only. Glade and Kaner continued to rep-
resent Samper through the Wells phase, with the accuseds
continuing as supporting co-counsel, communicating almost
daily with Glade and Kaner. Samper ultimately did not file
a Wells Submission.
Fitzhenry and Eagleburger also each had Wells
meetings with the SEC, attended by their respective inde-
pendent counsel and Ellis. Ellis worked on a draft Wells
Submission for Eagleburger at Neil’s request.
Individual negotiations with the SEC commenced
thereafter, resulting in separate settlement orders, finalized
in judgment form by October 2, 2002, between the SEC and
FLIR, Samper, and Eagleburger; an order as to Fitzhenry
issued later, in November 2002.9 The accuseds represented
9
Among other things, the SEC’s judgment against FLIR set out several
SEC findings of fraud—which FLIR neither admitted nor denied—relating to
FLIR’s revenue recognition practices and other accounting and related activities.
The order included a “cease and desist” provision, respecting future violations
of federal securities law, and, because of the fraud findings, it also removed for
a five-year period FLIR’s “safe harbor” protection under federal securities law.
(Witnesses testified that, when in place and when predicate conditions are met,
the “safe harbor” protection shields a public company from legal actions based
on incorrect financial projections.) As a result of its SEC judgment, FLIR also
was later required to defend against a costly debarment proceeding, which—had
debarment been ordered—would have prohibited FLIR from selling its products
to the federal government, a key customer.
The SEC’s judgment against Samper permanently enjoined him from engag-
ing in several particular actions in violation of federal securities law; imposed
a civil penalty of $110,000 and a disgorgement order of $52,500 plus interest;
and permanently prohibited him from serving as an officer or director of a com-
pany that issued securities or was required to file SEC reports. The SEC’s judg-
ment against Eagleburger contained several injunction provisions similar to
the judgment against Samper and imposed a civil penalty of $25,000. The SEC
order against Fitzhenry precluded him from practicing before the SEC for five
704 In re Ellis / Rosenbaum
FLIR in its negotiations, but did not participate in negoti-
ations involving the three individual clients, who instead
continued to be represented by their respective indepen-
dent counsel. Following finalization of the SEC settlements,
the accuseds considered their representation of Samper,
Fitzhenry, and Eagleburger—and of Daltry, who had not
received a Wells Notice—to be at an end. Stringer did not
settle with the SEC, and the SEC later filed a complaint
against him.
In the same general timeframe as the SEC Wells
process and settlements, FLIR continued to defend against
Stringer’s wrongful termination action. Wynne, who by now
had replaced Fitzhenry as FLIR’s General Counsel, deter-
mined that the SEC’s open Stringer investigation might be
helpful to FLIR in defending against his wrongful termi-
nation action. After the SEC settlements against FLIR and
Samper had been finalized, Wynne reviewed the SEC’s com-
plaint against Stringer and was surprised that it did not
include any allegation about the Swedish Drop Shipment
entry, which Wynne thought was the most egregious exam-
ple of financial irregularity tied directly to Stringer. Wynne
also thought that that entry—which never had identified
either an underlying transaction or product—was criti-
cal to FLIR’s defense against Stringer’s pending wrongful
termination action because it tended to justify Stringer’s
termination. Wynne therefore asked Rosenbaum, in her
capacity as FLIR’s counsel, to contact the SEC and inquire
about the absence of that entry from the SEC’s complaint
against Stringer. At that time, Rosenbaum considered her
representation of all the joint representation clients other
than FLIR to be over; also, both she and Ellis thought that
the Swedish Drop Shipment entry implicated Stringer, but
not Samper, who no longer had a pending action before the
SEC. Rosenbaum called the SEC on October 3, 2002, con-
veying Wynne’s offer that FLIR would assist the SEC in
its case against Stringer and noting Wynne’s surprise that
the SEC’s complaint against Stringer did not mention the
Swedish Drop Shipment.
years. The settlements with all three individual clients incorporated consents to
entry of judgment or order, in which the clients neither admitted nor denied the
allegations in the SEC complaints against them.
Cite as 356 691 (2015) 705
C.  Fitzhenry’s Bar Matter
Also in October 2002, Fitzhenry asked Ellis to
self-report to the Bar on Fitzhenry’s behalf, regarding an
acknowledgment in Fitzhenry’s Wells Submission and SEC
settlement order that he had signed an inaccurate manage-
ment representation letter in 1999, in reliance on prior sig-
natures from Stringer, Samper, and others.10 Ellis notified
the Bar and sent a confirming letter in November 2002,
explaining that Fitzhenry by his signature had intended
to verify only the legal—not accounting—representations
made in the management representation letter and that
he otherwise had relied on FLIR’s CEO (Stringer), CFO
(Samper), and outside auditors for verification that a par-
ticular sale referred to in the letter could be recorded and
that the accounting representations were therefore accu-
rate. The next month, Ellis sent the Bar additional materi-
als and a longer letter that, among other things, reiterated
that Samper, as CFO and also a signatory on the letter, was
a person directly responsible for accounting issues at FLIR
and that Samper had assured Fitzhenry that the represen-
tations in the letter were accurate. The Bar filed a complaint
against Fitzhenry in November 2003, and Ellis thereafter
represented him in his Bar matter. This court ultimately
suspended Fitzhenry for 120 days, for violating former
DR 1-102(A)(3) (conduct involving misrepresentation). In re
Fitzhenry, 343 Or 86, 162 P3d 260 (2007).
D.  Department of Justice Investigation
In January 2003, an Assistant United States
Attorney, Garten, told Ellis that the Department of Justice
(DOJ) was opening a criminal investigation into FLIR’s
accounting. None of the involved lawyers who testified at
the trial panel hearing—including the accuseds—had antic-
ipated a criminal investigation, and they all were surprised
to learn about it.11 Over the next several weeks, Garten and
10
The letter was a negative assurance letter to FLIR’s independent auditor,
intended to represent that its contents—which concerned several transactions—
were accurate to the best of each signatory’s belief. Daltry, Stringer, Samper, and
others had signed the letter before Fitzhenry.
11
According to testimony in the record, in the early 2000s, if the DOJ became
interested in the target of an SEC investigation, then the SEC investigation typ-
ically would be stayed and the DOJ would commence its own investigation. That
706 In re Ellis / Rosenbaum
the accuseds either met or communicated several times, and
the accuseds produced FLIR documents to the DOJ or the
FBI at Garten’s request. As discussed below and later in
this opinion, the nature of the conversations and extent of
the document production underlie some of the Bar’s conflict
of interest and misrepresentation allegations.
Garten initially told the accuseds that he did not
intend to target FLIR, but he pressed for both FLIR and the
accuseds personally to cooperate with the DOJ in building a
case against all potential defendants. In a subsequent meet-
ing that Ellis attended, Lewis assured Garten that FLIR
would cooperate, but the accuseds did not think that they
ethically could assist in a case against their former clients.
Garten later wrote to the accuseds and reiterated
his request that they cooperate; his letter also suggested
that FLIR had requested immunity.12 Garten eventually
withdrew his request for the accuseds’ personal cooperation,
although he continued to request assistance with document
production and witness scheduling. Garten also told the
accuseds in his last meeting with them that, as to Daltry
and Fitzhenry but not Samper, he might not pursue indi-
vidual criminal cases if they cooperated. Garten later sent
a confirming e-mail that continued to request the accuseds’
assistance in witness scheduling and reiterated an earlier
document request. Thereafter, the accuseds had no direct
contact with Garten other than document production—
which by this time was ongoing—and witness scheduling.
On the same day as the accuseds’ last meeting with
Garten, Rosenbaum told Glade—and later confirmed in
writing—that FLIR was not a DOJ target and that Samper
practice began to change after the Enron scandal that began in 2001, with its
ensuing criminal prosecutions that continued for years afterward. Here, unbe-
knownst to the accuseds and other participants in the SEC proceeding, the SEC
and the DOJ had been communicating about the FLIR investigation since sum-
mer 2000.
As to Samper specifically, the accuseds, Glade, and Kaner all thought
throughout the SEC investigation that Samper had not acted fraudulently and
did not think at the time of Samper’s SEC settlement that he would need a crim-
inal attorney.
12
As explained later in this opinion, other evidence in the record—including
testimony from various witnesses and a subsequent declaration from Garten—
showed that the DOJ did not make any immunity arrangement with FLIR.
Cite as 356 691 (2015) 707
and others, including Daltry, Fitzhenry, and Eagleburger,
might need lawyers in connection with the DOJ investi-
gation. Her confirming letter to Glade also stated that the
accuseds expected to continue to assist FLIR with docu-
ment production and witness scheduling. Rosenbaum sent
a similar letter to Eagleburger’s independent counsel, Neil.
Rosenbaum also eventually reached Daltry; on her recom-
mendation, Daltry immediately retained criminal defense
counsel, Myers. Rosenbaum told Myers about Garten’s doc-
ument requests, that FLIR was not a DOJ target, and that
Garten was inclined to give Daltry immunity if he cooper-
ated; Ellis reiterated several of those points to Myers the
next day. By about this time, Stoel Rives had sent numerous
FLIR documents to either the DOJ or the FBI—many were
part of the public record, and many, but not all, had been
produced to the SEC previously.
In late February 2003, after meeting with Garten
to reiterate FLIR’s intent to cooperate, Wynne proposed to
the accuseds that FLIR retain separate counsel as to the
DOJ investigation but that the accuseds continue to produce
FLIR documents as needed and to schedule witness inter-
views.13 The accuseds tentatively agreed and determined
that they were not obligated to make any disclosure about
the arrangement to Daltry, Samper, or Eagleburger. They
nonetheless decided, in the exercise of caution, to send a dis-
closure letter and obtain consent.
On March 3, 2003, Rosenbaum sent a disclosure let-
ter to FLIR and also, in care of their individual counsel, to
Daltry, Samper, and Eagleburger. The letter explained that
FLIR was cooperating with the DOJ and did not expect to be
a defendant; that Stoel Rives had been asked to advise FLIR
and assist in producing documents and scheduling witness
interviews; that the investigation related to the accuseds’
earlier representations of Daltry, Samper, and Eagleburger,
and had potentially adverse consequences to them; and
that Stoel Rives would not voluntarily disclose either client
confidences or information or materials arguably subject
13
The accuseds characterize that arrangement as “Stoel Rives’s ministerial
role.” We refer to the arrangement as the accuseds’ limited representation of
FLIR during the DOJ investigation.
708 In re Ellis / Rosenbaum
to confidentiality claims. The former clients all consented.
In the meantime, the accuseds scheduled further witness
interviews and had produced more documents to the DOJ.
For its part, FLIR retained other counsel to represent it in
other aspects of the DOJ investigation.
In September 2003, Stringer, Martin, and Samper
were indicted in United States District Court for criminal
securities violations. They moved to dismiss, asserting viola-
tions of due process and self-incrimination protections stem-
ming from surreptitious cooperation between the SEC and
the DOJ. Samper further argued that the government had
taken unfair advantage of the accuseds’ purported conflict
of interest. The District Court agreed with the defendants’
arguments and dismissed the indictments in 2006, but
the Ninth Circuit vacated the dismissals in 2008.14 United
States v. Stringer, 535 F3d 929, 942 (9th Cir 2008). The
Ninth Circuit decision brought the case to the Bar’s atten-
tion. None of the clients or lawyers involved complained to
the Bar about the accuseds’ conduct.
E.  Bar Complaints and Trial Panel Hearing and Decision
The Bar filed amended complaints against the
accuseds in February 2012, alleging violations of former DR
1-102(A)(3) (misrepresentations by omission) (one cause and
one alternative cause as to each); former DR 5-105(C) (former-
client conflict) (one alternative cause as to each, and one addi-
tional cause as to Ellis); and former DR 5-105(E) (current-
client conflict) (nine causes as to Rosenbaum, and 10 as to
Ellis). The amended complaints were identical, except that
the complaint against Ellis contained two additional allega-
tions concerning his representation of Fitzhenry in the lat-
ter’s Bar matter.
The trial panel conducted a hearing in 2012 and
concluded in 2013 that the Bar had not proved most of the
alleged violations, but had proved some violations, and fur-
ther determined that the appropriate sanction was a public
reprimand. The accuseds requested review of all the panel’s
conclusions that violations had occurred, and the Bar raised
14
The DOJ eventually moved to dismiss most of its charges against Stringer
and Samper, but ultimately obtained one misdemeanor conviction, for receiving
stolen money, as to each of them.
Cite as 356 691 (2015) 709
additional challenges to several panel conclusions that no
violation had occurred. We summarize the panel’s decisions
at issue on review in our discussion below.
II.  DISCIPLINARY RULES
As noted, the Bar’s complaints alleged misconduct
under the former Code of Professional Responsibility.15 Former
DR 5-105 set out the client-conflict rules and provided, in part:
“(A)  Conflict of Interest. A conflict of interest may be
actual or likely.
“(1)  An ‘actual conflict of interest’ exists when the
lawyer has a duty to contend for something on behalf of
one client that the lawyer has a duty to oppose on behalf of
another client.
“(2)  A ‘likely conflict of interest’ exists in all other situ-
ations in which the objective personal, business or property
interests of the client are adverse. A ‘likely conflict of inter-
est’ does not include situations in which the only conflict is
of a general economic or business nature.
“* * * * *
“(B)  Knowledge of Conflict of Interest. For purposes
of determining a lawyer’s knowledge of the existence of a
conflict of interest, all facts which the lawyer knew, or by
the exercise of reasonable care should have known, will be
attributed to the lawyer.
“(C)  Former Client Conflicts—Prohibition. Except as
permitted by [former] DR 5-105(D), a lawyer who has rep-
resented a client in a matter shall not subsequently repre-
sent another client in the same or a significantly related
matter when the interests of the current and former clients
are in actual or likely conflict. Matters are significantly
related if either:
“(1)  Representation of the present client in the subse-
quent matter would, or would likely, inflict injury or dam-
age upon the former client in connection with any proceed-
ing, claim, controversy, transaction, investigation, charge,
15
We quote the former disciplinary rules at issue from the 2000 version of
the former Code of Professional Responsibility. The text from the 2000 versions of
the rules remained the same through 2004, which spans the years of the events
at issue in this case.
710 In re Ellis / Rosenbaum
accusation, arrest or other particular matter in which the
lawyer previously represented the former client; or
“(2)  Representation of the former client provided the
lawyer with confidences or secrets as defined in [former]
DR 4-101(A), the use of which would, or would likely, inflict
injury or damage upon the former client in the course of the
subsequent matter.
“(D)  Former Client Conflicts—Permissive Representa-
tion. A lawyer may represent a client in instances otherwise
prohibited by [former] DR 5-105(C) when both the current
client and the former client consent to the representation
after full disclosure.
“(E)  Current Client Conflicts—Prohibition. Except as
provided in [former] DR 5-105(F), a lawyer shall not rep-
resent multiple current clients in any matters when such
representation would result in an actual or likely conflict.
“(F)  Current Client Conflicts—Permissive Representa-
tion. A lawyer may represent multiple current clients in
instances otherwise prohibited by [former] DR 5-105(E)
when such representation would not result in an actual
conflict and when each client consents to the multiple rep-
resentation after full disclosure * * *.”
Former DR 10-101(B) established the requirements for “full
disclosure” under former DR 5-105; it provided, in part:
“(1)  ‘Full disclosure’ means an explanation sufficient
to apprise the recipient of the potential adverse impact on
the recipient, of the matter to which the recipient is asked
to consent.
“(2)  As used in * * * [former] DR 5-105 * * *, ‘full disclo-
sure’ shall also include a recommendation that the recipi-
ent seek independent legal advice to determine if consent
should be given and shall be contemporaneously confirmed
in writing.”
Finally, former DR 1-102(A) provided, in part:
“(A)  It is professional misconduct for a lawyer to:
“* * * * *
“(3)  Engage in conduct involving dishonesty, fraud,
deceit or misrepresentation.”
Cite as 356 691 (2015) 711
Below, we address each of the trial panel’s conclu-
sions concerning the rules set out above that are at issue on
review. Our discussion is organized in the same chronologi-
cal order in which the underlying events occurred.
III.  FIRST CAUSE—FORMER DR 5-105(E),
CURRENT-CLIENT LIKELY CONFLICTS
AT OUTSET OF SEC INVESTIGATION
A.  Trial Panel Decision, Parties’ Contentions on Review,
and General Discussion
The first cause alleged that the accuseds had vio-
lated former DR 5-105(E) when they agreed to represent
FLIR on the one hand, and Daltry, Samper, Fitzhenry, and
Eagleburger on the other, at the outset of the SEC investi-
gation, with insufficient disclosure and consent concerning
likely conflicts of interest.16 The trial panel concluded that
no likely conflict of interest existed. The Bar challenges
that conclusion on review, arguing in part that the panel
incorrectly applied the “actual conflict” standard under for-
mer DR 5-105(A)(1), instead of the “likely conflict” standard
under former DR 5-105(A)(2). The Bar contends that, under
that latter standard, the interests of FLIR, Daltry, Samper,
Fitzhenry, and Eagleburger were adverse because, although
they all hoped that the SEC would find no misconduct, they
each had an interest in protecting themselves if it did—
including, to the extent necessary, identifying and testifying
against possible wrongdoers in the group. The Bar contin-
ues that the SEC was likely to share its information with
other agencies for use in future criminal, disciplinary, or
other proceedings, in which Fifth Amendment incrimination
implications and professional licenses might have been at
stake. The Bar also asserts that any self-protective step that
an individual client might have taken during the SEC inves-
tigation in turn might have been adverse to FLIR, which
had an interest in setting a cooperative tone with the SEC.
The Bar then argues that the accuseds’ disclosure letters did
16
The complaint alleged additional clients, but we address only those clients
whom the Bar has identified on review. Further, throughout this opinion, we have
addressed only particular current or former clients and particular issues that—
in collective consideration of the complaint allegations, the trial panel’s opinion,
and the parties’ arguments in their briefs—are properly at issue on review.
712 In re Ellis / Rosenbaum
not satisfy the “full disclosure” requirements under former
DR 10-101(B), to ensure informed consent to the joint repre-
sentation, and also that—because they did not send him a
letter—no disclosure at all had been made to Samper.17
The accuseds disagree that FLIR and the identified
individual clients had adverse interests at the outset of the
SEC investigation, and they assert that the trial panel there-
fore correctly determined that no likely conflict of interest
existed. The accuseds point to evidence demonstrating—in
their view—that the Bar’s adversity theories are incorrect
and that, instead, their multiple representation strategy
in the context of the SEC investigation was a common and
widely accepted practice that was both effective and ethical.
The accuseds relatedly argue that, even if any likely conflict
of interest existed, they disclosed all material information
to their clients so as to obtain their informed consent to the
joint representation.
The Bar is correct that its first cause focused on
“likely” current-client conflicts, rather than “actual” con-
flicts, at the outset of the SEC investigation. The Bar is also
correct that the trial panel nonetheless concluded that no
“actual” conflict had existed because the accuseds had no
duty at that point in time to contend for a position on behalf
of one client that they had a duty to oppose on behalf of
another, under former DR 5-105(A)(1). However, the panel
17
The complaints refer in the first cause to alleged conflicts arising only
“[w]hen [the accuseds] undertook to represent” all the clients in the SEC joint
representation and refer in the second cause to further alleged conflicts arising
during the investigation stage, through the course of witness interviews and end-
ing with the Wells phase. The trial panel concluded that the Bar had not proved
the allegations in the first cause, but, in reaching that conclusion, it extensively
addressed facts arising during the SEC investigation up to the Wells phase, not
those in existence at the outset of the investigation. In its brief, the Bar identifies
both the first and second causes as being at issue on review; however, it—like the
panel—primarily treats the first cause as relating to activities during the SEC
investigation up to the Wells phase (with some limited argument about conflicts
at the outset of the representation) and the second cause as concerning the Wells
phase.
Consistently with the amended complaints and the Bar’s identification of
the causes and issues on review, we consider allegations and arguments about
conflicts at the outset of the SEC investigation as part of the first cause, and we
then consider the panel’s determinations relating to ongoing investigation issues
before and during the Wells phase—and the parties’ respective arguments about
those determinations—as part of the second cause.
Cite as 356 691 (2015) 713
also concluded that the interests of FLIR and the individ-
ual clients were not “adverse” or in likely conflict during
the SEC investigation process—amounting to an effective
determination that no such conflict had existed at the outset
of the SEC investigation. We proceed to address the Bar’s
challenge under this cause by determining whether a likely
conflict existed.
Under former DR 5-105(A)(2), a likely conflict exists
when the “objective, personal, business or property interests
of the clients are adverse.” Concerning a multiple client repre-
sentation, the specific question under former DR 5-105(A)(2)
is whether the client interests “are adverse” (emphasis
added) at the time that the lawyer seeks to undertake the
representation, not whether they might be adverse in the
future. See In re Hostetter, 348 Or 574, 594, 238 P3d 13
(2010) (so stating; focus is whether respective interests were
“adverse from the outset,” not whether client injured later as
result of a conflict). Indeed, the fact that a conflict develops
later does not mean that adversity existed at the outset. See
In re Samuels/Weiner, 296 Or 224, 230, 674 P2d 1166 (1983)
(court rejected Bar’s prediction of potential future conflicts
in partnership and reliance on ultimate breakdown of part-
ners’ relationship to support allegations under earlier ver-
sion of former DR 5-105(A)).
Respecting “adverse” interests, this court has noted
under an earlier version of former DR 5-105 that a lawyer’s
independent judgment can be adversely affected when two
or more clients “have differing interests, whether such inter-
ests be conflicting, inconsistent, diverse, or otherwise dis-
cordant.”18 In re Johnson, 300 Or 52, 58 n 4, 707 P2d 573
(1985) (internal quotation marks omitted); see also Webster’s
Third New Int’l Dictionary 31 (unabridged ed 2002) (defin-
ing “adverse,” in part, as “acting against or in a con-
trary direction: OPPOSING * * * : HOSTILE, OPPOSED,
ANTAGONISTIC * * * 2 a : in opposition to one’s interests
: DETRIMENTAL, UNFAVORABLE”). This court has iden-
tified many scenarios involving readily identifiable client
18
Former DR 5-105(B) (1984) provided that “[a] lawyer shall not continue
employment if the exercise of his independent professional judgment in behalf
of a client will be or is likely to be adversely affected by his representation of
another client, except to the extent permitted under DR 5-105(C).”
714 In re Ellis / Rosenbaum
interests that are adverse by their nature, such as debtor-
creditor relationships, Hostetter, 348 Or at 593; spousal and
similar relationships with opposing legal interests, In re
Lawrence, 337 Or 450, 461, 98 P3d 366 (2004) (alleged bat-
terer and victim); In re Cohen, 316 Or 657, 661-62, 853 P2d
286 (1993) (spouses with diverging interests in different
proceedings—criminal mistreatment case for husband,
related juvenile case in which children might be taken from
wife); and criminal coconspirators or codefendants, In re
Jeffery, 321 Or 360, 370-71, 898 P2d 752 (1995); In re O’Neal,
297 Or 258, 260-66, 683 P2d 1352 (1984). In those circum-
stances, the court has explained that the conflicts rules
guard against a lawyer’s impaired judgment or divided loy-
alty arising from differing client interests. See O’Neal, 297
Or at 264 (lawyer who undertakes multiple client represen-
tations involving differing interests must carefully weigh
possibility that the lawyer’s judgment might be impaired or
loyalty divided); In re Porter, 283 Or 517, 521-22, 584 P2d
744 (1978) (to same general effect).
By contrast, this court also has explained that
the interests of multiple clients might be consistent—and
therefore not adverse—at the time that the lawyer seeks to
undertake a new representation. In In re Cobb, 345 Or 106,
190 P3d 1217 (2008), for example, the accused lawyer repre-
sented several investors who were part of investor partner-
ships in a company involved in questionable tax dealings.
The lawyer first represented the investors in “test cases”
against Internal Revenue Service (IRS) personnel and later
represented the investor partnerships in challenging the
disallowance of certain IRS deductions. Id. at 110-11. An
entity associated with the company later filed Chapter 11
bankruptcy, and the investor partnerships retained the
same lawyer to protect their interests—including assets—in
that proceeding. Id. at 111. Unrelated creditors later forced
the entity and the company into Chapter 7 bankruptcy, and
the lawyer represented the debtor company in that proceed-
ing for the sole purpose of raising a jurisdictional defense
that might have resulted in dismissal of the bankruptcy. Id.
at 112. The Bar argued that the lawyer had a current-client
likely conflict of interest when he represented the investor
partnerships in the Chapter 11 proceeding and the company
Cite as 356 691 (2015) 715
in the Chapter 7 proceeding, asserting what the Bar con-
tended were adverse positions. This court disagreed, rea-
soning that the lawyer’s assertions in both proceedings were
consistent with each other.19 Id. at 133 n 18. The court also
explained, in the course of rejecting a related conflicts argu-
ment on the Bar’s part, that the interests of the investor
partnerships and the company were not those of creditor-
debtor at the time in question. Id. at 133.
In sum, our task in determining whether the
accuseds’ clients’ interests were adverse at the outset of the
SEC investigation under former DR 5-105(A)(2) involves
determining from the record whether—at that point in
time—those interests were contrary or in opposition to one
another, or, instead, were consistent or aligned. We now turn
to the record to determine whether the Bar proved by clear
and convincing evidence that the accuseds’ clients’ interests
were adverse at the outset of the SEC investigation.
B.  No Likely Conflicts at Outset of SEC Investigation
Several witnesses testified as to the nature of the
respective clients’ interests at the outset of the multiple rep-
resentation. Ellis, who was experienced in the field, testified
that a public company subject to an SEC investigation has
two principal interests: to move the process along quickly
toward resolution, and to maintain public confidence. The
company’s board has similar interests, plus an additional
interest in assuring itself that current management main-
tains accurate financial statements. Officers—who run the
risk of liability for past conduct—also share the same inter-
ests as the company and have an additional interest in not
being damaged by speculative testimony. Employees have
an interest in avoiding workplace difficulties, such as fear
of retaliation at work or instability of the employer. And, all
witnesses have an interest in avoiding becoming embroiled
in any “process violation” during the investigation, such as
SEC accusations of untruthful testimony, failure to produce
19
According to the court, in the Chapter 11 proceeding, the lawyer had
argued on behalf of the investor partnerships that they had financial means to
maintain the assets and that their continuing payments to the company would
enable the company to meet other obligations. Similarly, in the Chapter 7 pro-
ceeding, the lawyer had taken the position that the investor partnerships’ pay-
ments were made for purposes of preserving the assets. Cobb, 345 Or at 133 n 18.
716 In re Ellis / Rosenbaum
requested documentation, or obstruction of justice. Ellis con-
tinued that all those identified interests are served by encour-
aging truthful, nonspeculative testimony and cooperation
with the investigation. Ellis rejected the notion—advanced
by the Bar—that FLIR had an interest in restricting the
flow of information to the SEC, which would have invited a
process violation accusation and could have breached FLIR’s
fiduciary duties as a public company; instead, FLIR, like the
other clients, had an interest in fully cooperating.
Ellis further testified that individual clients did not
have the same risks, at the outset of this SEC investigation,
that they might have in other litigation contexts. For exam-
ple, under federal law, potential SEC enforcement defen-
dants at that time were not subject to cross-claims for con-
tribution or other proportionate fault sharing arguments.
And, insurance in the SEC investigation context typically
covered defense costs for both the company and the individ-
ual directors and officers, but not settlement costs, so the
clients had no conflicting settlement interests in a common
insurance fund.
Both Ellis and Rosenbaum (also experienced in the
field) explained that an SEC investigation differs from pri-
vate securities litigation in other ways, in that (1) no formal
charges or allegations have been made; (2) the investigation
is factual only—here, to determine if FLIR’s restatements
were due to innocent errors or fraud—and witnesses are
expected only to answer questions to the best of their abil-
ity, with no cross-examination; (3) lawyers serve as counsel
for witnesses to prepare for and attend interviews, but do
not sponsor the witnesses as a lawyer would in trial; and
(4) lawyers do not advocate in any way for any client.
Relatedly, it was not in any client’s interest to project blame
on other clients during the SEC investigation stage. As Ellis
put it, in the context of an investigation concerning account-
ing irregularities, a securities violation either occurred or
did not occur, and no client has an interest in encouraging
the SEC to pursue any particular individual.
Finally, Ellis and Rosenbaum both testified that
each of their clients had an interest in learning as much
as possible about the SEC’s investigation, which the joint
Cite as 356 691 (2015) 717
representation—as arranged at the outset—permitted them
to do. By responding to document requests, attending wit-
ness interviews, and reviewing related documentation, the
accuseds were able to alert each client to particular trans-
actions at issue and witness testimony relevant to their own
interview preparation, so that they in turn could provide more
refreshed, forthright, and honest testimony. The Bar did not
effectively counter any of the above-summarized testimony.
As to the individual clients, Glade and Kaner con-
firmed that the accuseds’ joint representation was advanta-
geous to Samper and that, at the outset of the SEC investi-
gation, Samper’s interests were aligned with—not adverse
to—FLIR’s interests. Glade also agreed that Samper’s pri-
mary interest in testifying was to be truthful with the SEC,
and Kaner agreed that all participants had an interest in
cooperating. Glade did not recall thinking that the accuseds
had any conflict of interest with Samper during the course
of the SEC investigation, and Kaner also never concluded
that any conflict existed.20 Wynne and Fitzhenry similarly
testified that FLIR had no interest during the SEC investi-
gation in projecting blame on Samper or others.
The accuseds also presented the testimony of an
expert witness, Maletta, who was a former SEC lawyer
with extensive experience in securities enforcement and
governmental investigations, and who had authored part
of a leading text that included discussion of ethical issues
involved in SEC joint representations. Maletta testified
generally about accepted and common practices during an
SEC investigation, including a joint representation similar
to that arranged here, which can be very advantageous in
certain circumstances and was the presumptively preferred
approach of many who practiced in the field. Specifically,
Maletta testified that it was common practice for a single
firm to individually represent the company and subpoe-
naed company officers and employees, provided that no
20
In other parts of this opinion, we similarly observe that independent coun-
sel for certain clients, with knowledge of the key facts, did not think that any
conflict of interest existed as various events unfolded. Although another lawyer’s
assessment of the existence of a conflict is of course not dispositive, we find such
assessments here—made by several experienced lawyers—to be a useful compo-
nent for our consideration of the Bar’s alleged rule violations.
718 In re Ellis / Rosenbaum
identifiable conflicts of interest exist and the company sup-
ports the individuals’ positions.21 Maletta explained that
the interests of all such individuals are typically aligned
because they share an interest in ensuring that no enforce-
ment action is brought against anyone in the group. Maletta
testified, similarly to the testimony of the accuseds, that all
individuals involved typically have the same objectives, such
as cooperating, testifying truthfully, and being forthcoming
with the SEC. Maletta added that it is important in the rep-
resentation to prevent projecting blame, which is counter-
productive and not a useful strategy during the investi-
gation stage, when there are no formal defendants, sub-
jects, or targets. Maletta also confirmed the testimony of
the accuseds, Glade, and Kaner that the principal benefit
of joint representation is that each client obtains access to
information that otherwise would not be available because
the SEC has no obligation to share it. To be sure, Maletta
agreed with the Bar that joint representation can present
potential perils for clients, depending on the circumstances,
and that joint representation of a company and its man-
agers and employees can involve tensions at the outset—
particularly if intentional wrongdoing appears to have
occurred. As noted, however, Maletta also generally testified
about the advantages of joint representation and that the
company’s and represented individuals’ interests frequently
are aligned at the outset and during the investigation phase
in the manner that he described.22
21
Maletta contrasted the type of investigation at issue here—in which,
he explained, the interests of the company and individual clients tend to be
aligned—with an investigation that by its nature would typically involve inten-
tional wrongdoing by one or more persons, such as one involving insider trading,
embezzlement, or obstruction of justice.
22
In addition to Maletta’s general testimony about accepted and common
practices during an SEC investigation, the accuseds sought to introduce addi-
tional testimony from Maletta to the effect that the joint representation in this
case was consistent with general practice and that FLIR’s and the individual
clients’ interests had been aligned at the outset of the SEC investigation. The
Bar objected, and the trial panel ruled that Maletta could testify only in the
abstract as to SEC defense work generally, relying on In re Leonard, 308 Or 560,
570, 784 P2d 95 (1989). The accuseds filed an offer of proof containing Maletta’s
opinions on case-specific issues and contend on review that the panel’s ruling in
that regard was incorrect.
In light of our ultimate conclusion, after reviewing the evidence in the record
that the trial panel admitted, that the Bar did not prove by clear and convincing
Cite as 356 691 (2015) 719
The testimony summarized above comprises the
essential evidence in the record concerning the propriety of
the accuseds’ joint representation at the outset of the SEC
investigation. The Bar presented no contrary testimony—
expert or otherwise—detracting from the evidence showing
that joint representation was a common practice in SEC
investigations of this kind, that the clients’ interests at the
outset of such a representation tend to be aligned, and that
the joint representation in the context of the SEC’s investi-
gation here was appropriate under the circumstances.
Further, although the Bar raises several arguments
purporting to show why the accuseds’ clients’ interests were
adverse, those arguments effectively focus on the potential
for adversity to arise; they do not point to evidence in the
record showing that the clients’ interests were adverse at
the outset. For example, the Bar argues that the interests
of FLIR, Daltry, Samper, Fitzhenry, and Eagleburger were
adverse because they each had an interest in protecting
themselves if the SEC eventually found misconduct to have
occurred, including, to the extent necessary, identifying and
testifying against each other. As summarized earlier, how-
ever, the evidence showed that no client had any interest at
the outset of the SEC investigation in projecting blame on
others. The Bar also did not prove that the SEC was likely
to share its information in this case with other agencies for
use in future criminal, disciplinary, or other proceedings:
Although the Bar did show that the lawyers and witnesses
knew that the SEC was permitted to share its information
with other agencies, none of the involved lawyers had any
reasonable expectation that the DOJ would involve itself in
this particular investigation. The record further shows that,
at that point in time, the DOJ typically did not have a sig-
nificant level of involvement in ongoing SEC investigations,
unless it chose to actively step in and stay the SEC proceed-
ing. Finally, the Bar did not present evidence to support its
argument that any particular client’s hypothetical efforts to
take self-protective steps during the SEC investigation in
turn might have been adverse to FLIR.
evidence the violations alleged in this cause, it is not necessary to address the
accuseds’ contention on review that the panel erred in rejecting Maletta’s case-
specific testimony.
720 In re Ellis / Rosenbaum
We conclude that the Bar did not prove by clear
and convincing evidence that the interests of FLIR and the
accuseds’ individual clients Daltry, Samper, Fitzhenry, and
Eagleburger were adverse at the outset of the SEC investiga-
tion and therefore did not prove the existence of any current-
client likely conflict of interest at that time under former DR
5-105(A)(2) and former DR 5-105(E). Because we conclude
that the Bar did not prove the existence of such a conflict, we
need not decide whether the accuseds made sufficient dis-
closures so as to obtain consent to the joint representation
under former DR 5-105(F) and former DR 10-101(B).23
IV.  SECOND CAUSE—FORMER DR 5-105(E),
CURRENT-CLIENT ACTUAL AND LIKELY
CONFLICTS DURING SEC INVESTIGATION,
INCLUDING WELLS PHASE
A.  Trial Panel Decision and Parties’ Contentions on Review
The second cause alleged that the accuseds had
violated former DR 5-105(E) when they continued to repre-
sent FLIR on the one hand, and Daltry, Samper, Fitzhenry,
and Eagleburger on the other, during the SEC investiga-
tion, once it became apparent that actual or likely conflicts
had arisen. The Bar’s allegations under this cause gener-
ally refer to SEC witness interviews and also to the Wells
phase. The trial panel rejected several Bar theories under
this cause and specifically disagreed with the Bar that
any actual conflict of interest arose before the Wells phase,
which the Bar challenges on review. The panel did, however,
determine that the Bar proved its allegations of likely con-
flicts of interest and insufficient disclosure under this cause
in two respects.
First, the trial panel determined that FLIR’s state-
ment in its Wells Submission that referred to the SEC “pur-
suing fraud claims against one or more individuals who may
have been responsible” for the accounting errors, “to the
extent that wrong-doing may have occurred,” established
that FLIR’s interest in the SEC representation was adverse
23
We generally note, however, that a lawyer taking on a similar joint repre-
sentation should—in the exercise of caution—consider following applicable full
disclosure rules as to the key participants.
Cite as 356 691 (2015) 721
to those of Samper, Fitzhenry, and Eagleburger. In the panel’s
view, that statement told the SEC that FLIR had concluded
that wrongdoing had occurred and that fraud claims per-
haps were appropriate as to those individual clients—who
all ultimately had received Wells Notices and who each had
an interest in having FLIR refrain from acknowledging that
any wrongdoing had occurred. Because the accuseds did not
make full disclosure to or obtain consent from those clients
as to continuing the joint representation, the panel con-
cluded that the accuseds had violated former DR 5-105(E).
The accuseds challenge that conclusion on review.
Second, the trial panel determined that Rosenbaum
had violated former DR 5-105(E) when she called the SEC
on October 3, 2002, to inquire about the lack of reference to
the Swedish Drop Shipment in the SEC complaint against
Stringer. According to the panel, that phone call—made in
behalf of FLIR and Wynne—had been adverse to Samper’s
interests. The panel analyzed the phone call under the Bar’s
sixth cause, which more generally had alleged a current-
client conflict between Wynne and Samper (and others), and
did not specifically mention the phone call. On review, the
Bar contends that Rosenbaum’s October 3, 2002, phone call
to the SEC fell within its general allegations under the sec-
ond cause and that the panel’s conclusion was correct under
that cause. The accuseds, for their part, challenge on review
any determination that a rule violation occurred based on
Rosenbaum’s phone call to the SEC.
We address the parties’ arguments under this cause
in three parts: the SEC investigation leading up to the Wells
phase; the Wells phase; and Rosenbaum’s October 3, 2002,
phone call to the SEC.
B.  No Current-Client Likely Conflicts During Pre-Wells Phase
In disagreeing with the trial panel’s conclusion that
the Bar did not prove any likely conflict of interest during
the SEC investigation up to the Wells phase, the Bar argues
that (1) as witnesses provided information to the SEC, likely
conflicts of interest under former DR 5-105(A)(2) arose
between FLIR and the individual clients; (2) during that
time, any self-protective step that any individual client took
722 In re Ellis / Rosenbaum
was arguably adverse to other clients and to FLIR, which
had an interest in setting a cooperative tone with the SEC;
and (3) as the investigation progressed, FLIR’s interest in
remediation grew stronger, which in turn was adverse to
certain individual clients’ interests in remaining employed
and in preserving favorable professional reputations. In
response, the accuseds point to evidence in the record that
they assert supports the panel’s conclusion that no likely
conflicts arose in this time frame.
As with our earlier discussion about alleged con-
flicts at the outset of the SEC investigation, the Bar bears
the burden of proving by clear and convincing evidence
that the accuseds’ clients’ “objective personal, business or
property interests [were] adverse” at the time in question.
Former DR 5-105(A)(2). Also as part of our analysis, we con-
sider former DR 5-105(B), which provided that, “[f]or pur-
poses of determining a lawyer’s knowledge of the existence
of a conflict of interest, all facts which the lawyer knew, or
by the exercise of reasonable care should have known, will
be attributed to the lawyer.” Again, on de novo review of the
record, we conclude that the Bar did not prove the existence
of any likely conflict of interest up to the Wells phase. We
address the Bar’s arguments in turn, below.
Regarding witness testimony, the Bar in particular
cites SEC interviews of Fitzhenry, Wynne, Muessle (FLIR’s
then-current controller), and Chambers (the employee who
testified about document destruction), and argues that those
witnesses offered testimony that was adverse to Samper’s
interests. We consider four aspects of that testimony and,
as did the trial panel, conclude that the Bar did not show
that the testimony demonstrated the existence of any likely
conflict of interest.24
24
We focus on the four topic areas addressed in greatest detail at the trial
panel hearing. In the facts section of its brief, the Bar generally states that sev-
eral clients commented unfavorably on the credibility of others during their SEC
interviews and lists isolated factual assertions from several witnesses’ inter-
views, including witnesses other than the four mentioned in the text above. In
the argument section of its brief, however, the Bar states only very generally that
the accuseds heard all those witnesses offer SEC testimony that was adverse to
Samper, with no elaboration. The record in this case—which includes lengthy
excerpts from several SEC transcripts—is almost 12,800 pages long. We decline
to examine each isolated, separate factual statement set out in the Bar’s brief
Cite as 356 691 (2015) 723
As to Fitzhenry, the SEC asked him about the 1999
management representation letter that he and Samper
(and others) had signed, which had served to confirm the
accuracy of certain 1999 FLIR quarterly results. The letter
had confirmed that FLIR had recognized certain revenue
properly, but that representation later was determined to
be incorrect. Fitzhenry’s practice had been to sign such let-
ters, based on representations from Samper or the former
FLIR controller that the accounting representations made
therein were true. Fitzhenry told the SEC in at least one
interview that he did not recall having any particular con-
versation with Samper about the letter at issue—concern-
ing the specific accounting-related content in the letter or
otherwise—other than Samper asking him to sign it. In
response to questions about conversations with Samper
about the letter, Fitzhenry stated in that interview that
“the discussions that I would have had were more general
in nature, * * * representations from either [Samper] or [the
former controller], * * * someone who was [also] a signatory
of the letter, that the representations were true. * * * [B]ased
on those representations, generally, I signed the letter as
well.” For his part, Samper did not recall any particular con-
versation with Fitzhenry about the letter.25 In the Bar’s view,
Fitzhenry’s SEC testimony showed an adversity of interest
between Fitzhenry and Samper, based on Fitzhenry’s reli-
ance on Samper’s general assurance that the contents of the
letter had been accurate.
We disagree. First, the record shows that Samper
reasonably would have expected Fitzhenry to rely on his
assurances about accounting representations in the letter
because Samper, as CFO, accepted responsibility for FLIR’s
accounting. Nothing about Fitzhenry’s stated reliance on
without further explication from the Bar, such as providing context or a pur-
ported link between each statement and the existence of a current-client likely
conflict.
25
Fitzhenry later testified at his own trial panel matter, as well as to the
trial panel below, that he recalled generally asking Samper if the contents of the
letter were accurate, and Samper indicated that they were. Fitzhenry’s SEC tes-
timony in the record that the Bar cites does not include that specific recollection
on his part. And, in any event, Fitzhenry emphasized in both his Bar matter and
in this proceeding that Samper had a different recollection, in that he did not
recall any particular conversation about the contents of the letter.
724 In re Ellis / Rosenbaum
Samper established an adversity of interests between the
two clients. Second, we do not read Fitzhenry’s testimony—
as does the Bar—to have stated that he recalled having had
a specific conversation with Samper about the 1999 manage-
ment representation letter in which Samper assured him as
to its accuracy; instead, Fitzhenry only generally described
the process that typically occurred when he was presented
with such letters. And, even if we read Fitzhenry’s testimony
to mean that he had asked Samper for general accounting
assurances relating to that particular letter, when Samper
did not recall a similar conversation, such a scenario does
not prove by clear and convincing evidence that an adver-
sity of interest existed. The record shows—through tes-
timony from both the accuseds and their expert witness,
Maletta—that differing recollections are common during
the SEC interview phase. It also shows that Fitzhenry and
Samper shared the objective of providing truthful testimony
about their respective recollections. Finally, it shows that
the accuseds sent a transcript of Fitzhenry’s SEC testimony
to Glade and Kaner, and they did not think that Fitzhenry’s
testimony demonstrated any conflict with Samper.26 In short,
Fitzhenry’s SEC testimony did not establish by clear and
convincing evidence that a likely conflict of interest existed
between either FLIR or Fitzhenry and Samper during the
SEC interview phase.
As to Wynne, the Bar first focuses on Wynne’s SEC
testimony that FLIR’s new independent auditor had con-
cluded that a high percentage of FLIR’s accounting entries
had been erroneous and had observed that, in Wynne’s
words, “it’s hard to imagine that you could get more trans-
actions wrong than you got right.” The Bar reads that tes-
timony as an inference by the auditor that some intentional
wrongdoing had occurred, perhaps on Samper’s part, but
Wynne denied in that same interview that the auditor ever
had communicated to FLIR any conclusion about inten-
tional wrongdoing. And, when viewed in context, Wynne’s
testimony about the high percentage of errors related to
26
Fitzhenry testified in October 2000, and the transcript was sent to Kaner
in April 2001. Both Glade and Kaner generally testified that they did not think,
through the entry of the SEC settlements in September 2002, that any conflict
existed between any of the accuseds’ clients and Samper.
Cite as 356 691 (2015) 725
Stringer, not Samper; he specifically identified the auditor’s
assessment as a contributing factor in FLIR’s decision to
ask Stringer to resign.27 That testimony therefore does not
provide a basis for concluding by clear and convincing evi-
dence that a likely conflict of interest existed between FLIR
and Samper during the SEC interview phase.
The Bar also emphasizes Wynne’s trial panel testi-
mony about his ultimate conclusion—while the SEC inves-
tigation was ongoing—that Samper’s actions had amounted
to securities fraud. Specifically, by spring 2001, Wynne had
concluded that Samper had made entries and submitted
financial statements that contained figures manipulated as
a result of fraud; that is, that Samper had filed financial
statements with the SEC based on entries that Samper by his
own admission either knew to be inaccurate or did not know
their accuracy. In Wynne’s view, that conduct amounted to
securities fraud as legally defined, even though Wynne had
not necessarily concluded that Samper himself had manip-
ulated any figures. The record shows that Wynne offered
that testimony carefully, so as not to assert any belief on his
part that Samper had engaged in intentional wrongdoing.28
And, in any event, neither accused learned until several
years later that Wynne had reached that general conclusion.
Nothing about that testimony from Wynne demonstrated
that FLIR had an interest adverse to Samper’s of which
either accused reasonably would or should have been aware
during the interview phase of the SEC investigation. See
former DR 5-105(B) (for purposes of determining lawyer’s
knowledge of existence of conflict of interest, all facts that
lawyer knew or by exercise of reasonable care should have
known are attributed to lawyer).
27
We further note that, the day after Wynne’s SEC interview, the accuseds
had a conversation with Glade in which Ellis generally described Wynne’s testi-
mony, including other testimony that the FLIR board’s concerns about Samper
had involved competence, not any integrity or honesty problem.
28
The Bar also points to Wynne’s trial panel testimony as to his belief that
Samper had “manufactured” the $4.6 million figure reflected by the Swedish
Drop Shipment. Wynne later elaborated on that comment, however, testifying to
his understanding that Samper’s figures had originated with Stringer and that
he had assessed Samper as having engaged in securities fraud based on Samper’s
entry of Stringer’s figures into FLIR’s books, made while in his capacity as CFO,
when he might not have known with certainty whether an underlying transac-
tion had occurred or whether sufficient documentation supported such an entry.
726 In re Ellis / Rosenbaum
As to Muessle, the Bar states that he identified in
an evaluation for FLIR and FLIR’s new independent auditor
questionable transactions that implicated Samper in wrong-
doing, which FLIR—through the accuseds—sent on to the
SEC. Muessle testified at the trial panel hearing about
his evaluation, which had explained to FLIR’s auditor why
certain transactions had been restated due to lack of sup-
porting documentation and also discussed other problem-
atic transaction reviews. None of Muessle’s evaluation doc-
umentation in the record mentioned Samper in a negative
light, and none of Muessle’s panel testimony suggests that
he ever thought that Samper had engaged in intentional
wrongdoing. Notably, also during the SEC interview phase,
Rosenbaum provided similar documentation on Muessle’s
transaction reviews to Glade and Kaner; as noted above,
Glade and Kaner never concluded during the course of the
SEC investigation—based on information that they received
from the accuseds on an ongoing basis—that Samper’s
interests were adverse to FLIR’s. The Muessle testimony
and evaluation documentation did not establish by clear and
convincing evidence that any adverse interest arose between
FLIR and Samper during the SEC interview phase.
As to Chambers, the Bar focuses on her testimony
about document destruction and other questionable repre-
sentations on Samper’s part about shipped inventory, which
the Bar views as having implicated Samper in wrongdo-
ing. The record shows, however, that Chambers was a low-
er-level employee without sufficient understanding of all
the detail surrounding FLIR’s shipping arrangements and
accounting processes, and so her testimony did not demon-
strate adversity with Samper in the manner that the Bar
contends. Indeed, Kaner testified that she and Glade had
discussed the possibility that Chambers’s testimony demon-
strated a conflict, but they agreed that a conflict had not
arisen and that the interests of FLIR and Samper remained
aligned. In that regard, we agree with the accuseds that
Chambers’s testimony illustrated a benefit of the joint repre-
sentation: Because Rosenbaum represented both Chambers
and Samper for purposes of the SEC interview phase, she
was present for Chambers’s interview and then was able
to confer with Glade and Samper, and adequately prepare
Cite as 356 691 (2015) 727
Samper, so as to provide the SEC with explanations about
issues arising from Chambers’s testimony—particularly
concerning circumstances about which Chambers had been
unaware. We disagree with the Bar that Chambers’s testi-
mony showed an adverse interest between FLIR and Samper
during the SEC interview phase.
The Bar next contends that self-protective actions
taken by individual clients during the SEC interview phase
showed that those clients had interests adverse to FLIR’s.
The Bar cites two examples, both of which appear from the
record to have been joint tactical recommendations made
to Samper by Glade, Kaner, and the accuseds: (1) Samper
participating in the SEC interviews instead of asserting
his Fifth Amendment privilege against self-incrimination;
and (2) Samper testifying early in the proceedings, to clar-
ify some SEC factual misunderstandings and to further
the joint strategy of showing that only innocent errors, not
intentional wrongdoing, had occurred.
In the Bar’s view, the lawyers’ Fifth Amendment
waiver advice showed that Samper had individual consid-
erations that were adverse to FLIR’s. The record estab-
lishes, however, that the four lawyers agreed that it was
in Samper’s best interest to cooperate with SEC interview
requests and that none of the lawyers reasonably could have
anticipated, during the SEC interview phase, that a DOJ
investigation was forthcoming. As to the lawyers’ early tes-
timony advice, the Bar asserts that that decision harmed
Samper in the ensuing DOJ investigation because the SEC
viewed him critically before all documentation was in order,
later giving the impression that he had not been honest. The
record does show that, in the end, the SEC determined that
Samper had been disingenuous at best and had been trying
to either mislead the SEC or distract from the full truth of
what had occurred. During the SEC interview phase, how-
ever, Glade and Kaner continued to think that cooperation
and forthcoming testimony was in Samper’s best interests,
and both had concurred in the decision to have Samper tes-
tify early.29 We disagree that those two tactical decisions
29
The Bar cites a letter that Kaner wrote to the accuseds several years later,
noting that Samper’s early testimony—intended to comply with FLIR’s efforts to
cooperate with the SEC—had put him on the spot before the documentation was
728 In re Ellis / Rosenbaum
showed an adversity of interests between Samper and FLIR,
and the Bar points to no other evidence of individual cli-
ents’ self-protective steps that might have showed such an
adversity.30
The Bar also argues that FLIR’s interest in adopt-
ing a remediation strategy grew as the pre-Wells investiga-
tion phase progressed, which was adverse to the individual
clients’ interests in remaining employed and preserving a
sound professional reputation.31 The Bar further asserts
that FLIR positioned itself during the investigation to seek
favorable treatment at the expense of individual clients
Daltry, Samper, and Eagleburger. The record shows, how-
ever, that FLIR’s general strategy during the SEC inter-
view phase remained the same all along—that is, to coop-
erate; to not admit that either FLIR or any of the accuseds’
individual clients had engaged in fraud; and, eventually, to
focus the SEC on FLIR’s remediation improvements since
the 1998 and 1999 accounting errors. Although, again, the
potential for adversity existed, the record does not show that
the clients’ interests were adverse during the SEC interview
phase and therefore does not establish that any current-
client likely conflict of interest existed.
complete and gave the impression that he had not acted honestly, which may have
contributed to his criminal indictment. The question under former DR 5-105(A)(2),
however, is whether the accused lawyer reasonably knew that the clients’ inter-
ests were adverse at the time in question. Kaner’s hindsight observation, follow-
ing several years’ worth of additional developments including a criminal prose-
cution, does not amount to clear and convincing evidence that the accuseds knew
that any actual adversity existed during the SEC interview phase. At that time,
the possibility continued that FLIR’s and Samper’s interests might diverge, but,
as explained above, none of Samper’s four lawyers ever concluded during that
period in time that any adversity in fact had arisen, and nothing in the record
counters that assessment.
30
The Bar cites Am. Bar Ass’n, Section of Bus. Law, The Securities
Enforcement Manual 477 (1997), for the proposition that company officers, direc-
tors, and employees involved in an SEC investigation have an opportunity to
limit individual exposure if they cooperate with the SEC. However, the Bar
cites to no evidence in the record—other than that discussed above—showing
that any of the accuseds’ clients in this case took any self-protective step that
established by clear and convincing evidence that their interests were adverse to
FLIR’s.
31
The Bar again cites The Securities Enforcement Manual at 477: “Corpo-
rations may avoid or lessen liability by taking prompt action to replace wrong-
doers and showing that the wrong was a matter of individual not corporate fault.
These possibilities create considerable room for conflicts to develop.”
Cite as 356 691 (2015) 729
C.  No Current-Client Actual or Likely Conflicts of Interest
During Wells Phase
1.  General Discussion
The trial panel concluded that a single statement in
FLIR’s Wells Submission—that FLIR understood that the
SEC was pursuing fraud claims against one or more people
responsible for its accounting issues—established a current-
client likely conflict of interest between FLIR and Samper,
Fitzhenry, and Eagleburger, all of whom received Wells
Notices, and that the accuseds did not disclose that conflict.
On review, the accuseds challenge that conclusion, arguing
that FLIR’s interests were not adverse to those three indi-
vidual clients during the Wells phase. The Bar, for its part,
contends that various parts of FLIR’s Wells Submission
showed that current-client actual conflicts of interest arose
during the Wells phase between FLIR and the identified cli-
ents, and those actual conflicts could not be waived, even
following full disclosure, under former DR 5-105(F).32
The following facts are important to fully address
the parties’ arguments. The SEC issued Wells Notices to
four of the accuseds’ clients—FLIR, Samper, Fitzhenry,
and Eagleburger—and also to Stringer and Martin (and
others). Upon receipt of Samper’s Wells Notice, Glade and
Kaner transitioned to lead counsel during the Wells phase
and ensuing negotiations, and the accuseds transitioned
to a supporting role. Upon receipt of Fitzhenry’s and, later,
Eagleburger’s Wells Notices,33 Ellis conferred with each of
those clients, told them that they immediately needed to
retain independent counsel, and then offered to serve as
supporting co-counsel as needed—ultimately providing
some support for both clients based on requests from their
individual lawyers. As for FLIR, the accuseds (mostly Ellis),
Wynne, and Fitzhenry worked on FLIR’s Wells Submission,
32
We note that the trial panel specifically found that the identified statement
in FLIR’s Wells Submission amounted to a conflict of interest between FLIR and
several of the accuseds’ individual clients. The Bar clarifies—and we agree—that
the question is not whether that statement itself constituted a conflict, but, rather,
whether that statement provided persuasive evidence that a conflict existed.
33
Eagleburger’s Wells Notice was not received until after FLIR had filed its
Wells Submission.
730 In re Ellis / Rosenbaum
which FLIR filed with the SEC without first sending to the
accuseds’ other clients for review.
FLIR’s Wells Submission focused on FLIR’s remedi-
ation efforts and stated that it had “removed” those “senior
managers who were responsible for the accounting errors
and the management problems, including the President and
CEO, Stringer.” It next referred by position (not by name)
to other former management personnel no longer with the
company, including Daltry and Samper (both identified as
having resigned earlier), and Eagleburger and Martin (both
identified as having been terminated). It continued that,
“[h]aving satisfied itself that it had identified and removed
all those in senior management who were responsible for
the Company’s troubles, the Board immediately turned its
attention to assisting remaining management in rescuing
and then improving the Company.” FLIR’s Wells Submission
later stated, under “Remediation,” that “[t]he individuals
who were responsible for the accounting errors have been
terminated, and the Company is under new executive and
financial management.” In its final, “Offer of Settlement”
section, FLIR’s Wells Submission stated that, “to the extent
wrong-doing may have occurred, we understand that the
SEC is pursuing fraud claims against one or more individu-
als who may have been responsible,” inferentially intended
to refer to Stringer and Martin. Throughout, FLIR’s Wells
Submission described the 1998 and 1999 accounting issues
as “errors” or “problems,” not “fraud,” which carried a criti-
cal distinction in the securities context.
The record shows that, in drafting and filing FLIR’s
Wells Submission, the accuseds and FLIR did not seek to cast
a negative light on either Samper or Eagleburger, and FLIR’s
Wells Submission objectively did not expressly take any par-
ticular position or make any characterization about either of
them, other than noting the former CFO’s (Samper’s) coop-
eration with the SEC investigation. It included one express
favorable reference to Fitzhenry, in an effort to confirm his
positive participation as part of the new management team.
At the time that FLIR prepared its Wells submission, the
accuseds had concluded that only Stringer and Martin had
acted fraudulently. Also at that time, Eagleburger had not
Cite as 356 691 (2015) 731
yet received a Wells Notice. And, although Glade initially
thought that FLIR’s Wells Submission reflected poorly on
Samper, he and Kaner continued to communicate regularly
with the accuseds as Samper’s co-counsel and also continued
to think that FLIR’s and Samper’s interests were aligned
for purposes of the SEC proceeding. During the Wells phase,
the accuseds and the other individual lawyers reasonably—
but, as it turns out, incorrectly—anticipated that no crimi-
nal investigation would occur.
2.  No Current-Client Actual Conflict
The Bar first contends that the statement in FLIR’s
Wells Submission about the SEC pursuing fraud claims
against those responsible for the accounting issues—
particularly when considered with other components of
FLIR’s Wells Submission discussed above—demonstrated
an actual, nonwaivable conflict of interest under former DR
5-105(A)(1) between FLIR and the accuseds’ individual clients
Daltry, Samper, and Eagleburger. See former DR 5-105(F)
(only current-client likely conflicts can be waived by client
consent after full disclosure). The Bar thinks it significant
that, when the SEC sent the individual Wells Notices, the
accuseds learned who the SEC considered to be wrongdoers,
giving weight to the argument that FLIR itself should not
be punished. At that point, the Bar continues, the accuseds’
duty to FLIR to admit misconduct by Daltry, Samper, and
also Eagleburger (who received a Wells Notice later) became
irreconcilable with their duty to refrain from accusing those
three individual clients of wrongdoing. Nonetheless, the
accuseds then prepared and filed FLIR’s Wells Submission,
which—in the Bar’s view—inferentially referred to Daltry,
Samper, and Eagleburger as wrongdoers.34
Former DR 5-105(A)(1) defines an actual conflict for
purposes of former DR 5-105(E) as a scenario in which a
34
The Bar also contends on review that an actual conflict of interest existed
when the accuseds negotiated FLIR’s SEC settlement, which resulted in a judg-
ment that included—without admitting or denying—a finding of fraud by prior
management. However, the Bar’s allegations in the second cause end with the
filing of FLIR’s Wells Submission and do not mention FLIR’s settlement negotia-
tions, and no other allegation refers to FLIR’s settlement negotiations. We there-
fore do not discuss any Bar argument relating to those negotiations or the final
SEC judgment against FLIR.
732 In re Ellis / Rosenbaum
lawyer “has a duty to contend for something on behalf of
one client that the lawyer has a duty to oppose on behalf
of another client.” Similarly to our earlier discussion about
likely conflicts of interest, such conflicting obligations often
are readily apparent from the nature of the representations
and client interests involved. See In re Bristow, 301 Or 194,
204, 721 P2d 437 (1986) (actual conflict of interest when
lawyer represented one client in action to enforce franchise
agreement while simultaneously representing other client
in action seeking to hold same agreement invalid; citing
cases for same proposition). The court also has explained,
however, that the clients’ underlying objective interests at
the time in question determine the nature of any obligation
on the lawyer’s part to contend for or oppose a particular
legal position on each client’s behalf. See Cobb, 345 Or at 133(lawyer represented both investor partnerships and entity
related to company in which they had invested in complex
bankruptcy proceedings; at time in question, investor part-
nerships not necessarily entity’s creditors, and all parties
shared goal of dismissal; no actual conflict); Cohen, 316 Or
at 662 (whether actual conflict exists depends on clients’
objective interests).
Here, the record does not establish the existence of
conflicting duties relating to the accuseds’ representation
and protection of their respective clients’ objective inter-
ests during the Wells phase. The fact that Wells Notices
had issued and the clients then considered and developed
responses to them did not, standing alone, mean that the
accuseds had a duty to contend for a particular position on
FLIR’s behalf that they had a duty to oppose on behalf of
Daltry, Samper, or Eagleburger. Indeed, the record shows
that FLIR would have been responsible for fraud committed
by its officers, managers, and employees, in the context of
the SEC’s investigation.35
As to FLIR’s particular Wells strategy, the record
shows that FLIR had an objective interest in convincing
the SEC of the sincerity and significance of its remediation
35
As noted earlier, see 356 Or at ___ n 9, the findings of fraud in the SEC’s
ultimate judgment against FLIR—based on various individual personnel
actions—resulted in FLIR losing its safe harbor protections under federal securi-
ties law.
Cite as 356 691 (2015) 733
efforts, including its transition to new management. Nothing
about that interest obligated the accuseds to assert on FLIR’s
behalf a position that they were obligated to oppose in rep-
resenting the interests of Daltry, Samper, or Eagleburger—
such as, as the Bar contends, asserting that one or more of
those clients had engaged in intentional wrongdoing. And,
although FLIR’s new management did not include Daltry,
Samper, or Eagleburger, the accuseds were not obligated on
behalf of those clients to oppose FLIR’s focus on its remedi-
ation strategy. Indeed, expert testimony in the record estab-
lished that a remediation defense, not unusual in an SEC
proceeding of this kind, focuses on the future as opposed
to any action that occurred in the past. And finally, none of
the lawyers involved—including the independent lawyers—
thought that a conflict existed; as to Samper specifically,
Glade continued to think that no conflict existed even after
he had reviewed and considered FLIR’s Wells Submission.
The trial panel correctly determined that no actual conflict
of interest existed between FLIR and the accuseds’ indi-
vidual clients Daltry, Samper, and Eagleburger during the
Wells phase.
3.  No Current-Client Likely Conflict
Next, the accuseds contend that the trial panel erred
in concluding that the statement in FLIR’s Wells Submission
about pursuit of fraud claims against responsible individ-
uals established an adversity of interests, and therefore a
likely conflict, between FLIR and individual clients Samper,
Fitzhenry, and Eagleburger. The accuseds specifically argue
that that statement did not suggest or imply that those indi-
vidual clients had committed fraud or encouraged the SEC
to act against any client; instead, FLIR’s Wells Submission
identified only Stringer and, inferentially, Martin, as indi-
viduals who had been “removed” from employment and
(again, inferentially) were presently the subject of SEC fraud
claims. Otherwise, FLIR framed its response in light of
remediation, which accused no client of earlier wrongdoing.
The accuseds also emphasize that FLIR’s Wells Submission
labeled FLIR’s 1998 and 1999 accounting issues as “errors”
and “problems”—words that objectively and understandably
did not admit, indicate, or imply fraud on the part of anyone
734 In re Ellis / Rosenbaum
at FLIR. The Bar, as noted (and rejected) above, responds
by contending that FLIR’s Wells Submission showed an
actual conflict of interest between FLIR on the one hand,
and Samper and Eagleburger on the other. Here, we con-
sider the Bar’s underlying arguments about an actual con-
flict of interest to determine whether the Bar proved a likely
conflict of interest as to the three clients that the panel iden-
tified (Samper, Fitzhenry, and Eagleburger).
As already explained, a likely conflict of interest
existed if the “objective personal, business or property
interests” of FLIR and the accuseds’ individual clients “[we]
re adverse,” former DR 5-105(A)(2)—that is, if their objec-
tive interests were contrary or in opposition to one another
at the time in question. This court has explained that the
representation of multiple clients embroiled in the same
action often gives rise to likely (and sometimes actual) con-
flicts, due to the clients’ adversity of interests. In the crim-
inal context, for example, such an arrangement typically
results in an actual or likely conflict, due to the potential
interest of one client in obtaining a favorable outcome in
exchange for testifying or offering evidence against another
client. Jeffery, 321 Or at 370-71; see also id. at 372-73 (state-
ments to police by one client that implicated another cli-
ent amounted to actual or likely conflict); O’Neal, 297 Or
at 260-66 (likely conflict when representing criminal code-
fendants, even where lawyer limited representation to
negotiating pleas). Adverse interests of course can arise in
other contexts, as well. See In re Barber, 322 Or 194, 200,
904 P2d 620 (1995) (under earlier version of former DR
5-105, likely conflict when lawyer represented two parties
injured in same motor vehicle accident, where insurance
proceeds insufficient to cover injuries of both). In determin-
ing whether the Bar proved that a likely conflict existed at
the time in question, we must identify, based on evidence
in the record, the objective interests involved. See Cohen,
316 Or at 661-62 (in determining that husband and wife
had adverse interests in husband’s criminal mistreatment
proceeding and wife’s pending juvenile proceeding, court
identified objective personal interests of each at the time in
question, notwithstanding earlier client declarations that
they shared a common goal).
Cite as 356 691 (2015) 735
As noted earlier, the record shows that FLIR’s objec-
tive interest during the Wells phase was to persuade the SEC
that, from a forward-looking perspective based on multiple
changes that had been made, FLIR should not be subject
to any SEC enforcement action. FLIR’s actions in crafting
its Wells Submission advanced that interest; specifically, it
sought to frame the accounting events in a neutral manner
and then to focus the SEC on its remediation efforts—such
as new management, a larger, professional accounting staff,
a new independent auditor, and clean audits following the
years in question. By contrast, FLIR did not have any objec-
tive interest in focusing on past liability or engaging the
SEC in any factual argument about events underlying the
1998 and 1999 accounting issues; the record shows that it
would have been counterproductive during the Wells phase
for FLIR to argue about those events. Additionally, as noted
earlier, FLIR had no interest in seeing any officer, manager,
or employee accused of fraud, for which FLIR ultimately
would have been responsible.
Like FLIR, clients Samper, Fitzhenry, and
Eagleburger each shared an objective interest during the
Wells phase in mitigating against a negative individual out-
come from the SEC proceedings, including an interest in
avoiding ancillary and collateral consequences that might
apply to them as individuals, but not to the company. For
example, in addition to a separate SEC enforcement action,
Samper was potentially subject to disgorgement penalties,
and Fitzhenry was potentially subject to a sanction that
would have prevented him from practicing before the SEC.36
Also, as part of their individual defenses, the clients—like
FLIR—had an interest in convincing the SEC that they had
not engaged in fraud. As the Bar argues (and the accuseds
do not disagree), those three clients also shared a general
interest in not having FLIR accuse them of wrongdoing.
We conclude that the Bar did not prove by clear and
convincing evidence that FLIR’s interests were adverse to
those of Samper, Fitzhenry, or Eagleburger during the Wells
phase. As explained, all the clients shared an interest in
36
In that regard, we note that concerns that might have arisen in the civil
action context—such as joint and several liability, cross-claims, or competing
interests in insurance proceeds—did not apply in the SEC context.
736 In re Ellis / Rosenbaum
mitigating against a negative outcome in the SEC investiga-
tion. The fact that different consequences could flow from neg-
ative outcomes—for example, to FLIR as a company, to Samper
as a former officer, or to Fitzhenry as General Counsel—does
not mean that the respective clients’ interests were neces-
sarily adverse to each other. And, as discussed above, the
record shows that none of the lawyers or individuals involved
anticipated, during the Wells phase, that any DOJ investiga-
tion—which certainly carried at least the potential for future
adverse conflicts of interest—might be forthcoming. See for-
mer DR 5-105(B) (when determining lawyer’s knowledge of
existence of conflict, all facts that lawyer knew or reasonably
should have known are attributed to lawyer).37
As to FLIR’s prospective remediation defense spe-
cifically, expert testimony established that it was a rec-
ognized strategy in SEC investigations of this kind, even
where joint representation had occurred. Although isolated
statements in FLIR’s Wells Submission arguably could be
read to inferentially cast a negative light on Samper or
Eagleburger, other evidence in the record provides contrary
context to those statements, regarding FLIR’s remediation
defense and its objective interest in persuading the SEC to
look forward, not backward. For example, expert testimony
showed that a remediation defense typically involves differ-
ing arguments for the company than for individuals, but that
does not necessarily mean that their interests are adverse.
Indeed, joint representation in SEC proceedings often con-
tinues in the same fashion that it did here—with the com-
pany’s lawyers continuing to represent individual clients in
a supporting role during the Wells phase—because the cli-
ents’ various defenses can be synthesized with each other,
even if they are not identical. That is essentially what trans-
pired here. FLIR had an objective interest in focusing the
SEC on remediation, and FLIR’s Wells Submission therefore
did not engage the SEC about the earlier accounting issues;
instead, it focused on prospective remediation. By contrast,
37
Additionally, unlike the Bar and the trial panel, we read the statement in
FLIR’s Wells Submission about the SEC “pursuing fraud claims against one or
more individuals who may have been responsible” as a factual observation about
actions that the SEC had taken, not as a recommendation on FLIR’s part that the
SEC should pursue a fraud claim against any particular individual.
Cite as 356 691 (2015) 737
the individual clients each defended their own interests,
some by focusing on earlier events as needed.38 The record
does not clearly and convincingly support the Bar’s theory
that FLIR and the individual clients had objective interests
during the Wells phase that were adverse to each other.39
D.  Rosenbaum’s Phone Call to SEC Concerning Swedish
Drop Shipment Not Within Scope of Second Cause
The trial panel concluded that Rosenbaum’s October
3, 2002, phone call to the SEC to inquire about the Swedish
Drop Shipment entry demonstrated the existence of either
an actual or likely conflict under former DR 5-105(E)
between FLIR and Wynne on the one hand, and Samper
on the other, that Rosenbaum did not disclose. As noted,
the panel found that to be a violation under the sixth cause,
which had alleged current-client actual or likely conflicts
between Wynne and Samper.40 The Bar asserts on review
that Rosenbaum’s phone call to the SEC fell under its second
cause, which alleged similar conflicts between FLIR and the
accuseds’ individual clients, including Samper, during the
SEC investigation through the Wells phase. The accuseds
disagree that Rosenbaum’s phone call fell within the scope
of any allegation and contend that the panel erred in deter-
mining that any violation had occurred. As explained below,
we agree with the accuseds.
38
Fitzhenry’s Wells Submissions engaged the SEC about past events relat-
ing to his signature on the 1999 management representation letter. Samper,
for his part, opted not to file a Wells Submission at all, and Eagleburger’s
Wells Submission does not appear to be in the record. Nothing in FLIR’s Wells
Submission was inconsistent with the individual clients’ objective interests in
convincing the SEC that they each had not engaged in any intentional wrong-
doing or in mitigating against negative outcomes.
39
The Bar also argues that FLIR’s Wells Submission contained statements
that showed adverse interests between FLIR and Daltry. Daltry did not receive a
Wells Notice, however, and so the accuseds’ representation of him effectively had
ended when he completed his SEC testimony. The Bar did not prove any current-
client conflict of interest between FLIR and Daltry during the Wells phase.
40
The Bar’s sixth cause alleged that Wynne’s SEC testimony had implicated
Daltry and Samper as responsible for FLIR’s 1998 and 1999 financial misstate-
ments and accounting errors; however, Rosenbaum’s phone call did not pertain
to Wynne’s testimony. The trial panel acknowledged that the Bar did not specif-
ically allege wrongdoing on Rosenbaum’s part regarding the information con-
veyed to the SEC in her phone call but invoked ORCP 23 B in determining that a
violation had occurred. See ORCP 23 B (when issues not raised by pleadings are
tried by parties’ express or implied consent, those issues shall be treated as if
they had been raised in the pleadings).
738 In re Ellis / Rosenbaum
An accused lawyer must be put on notice “of the
conduct constituting the violation,” as well as the rule viola-
tion at issue. In re Magar, 296 Or 799, 806 n 3, 681 P2d 93
(1984). In that regard, BR 4.1(c) provides, in part:
“A formal complaint shall * * * set forth succinctly the
acts or omissions of the accused, including the specific
statutes or disciplinary rules violated, so as to enable the
accused to know the nature of the charge or charges against
the accused. “
That rule “does not obligate the Bar to plead any fact regard-
ing a charge * * * beyond those that the * * * [former] dis-
ciplinary rules identify.” In re Kluge, 332 Or 251, 262, 27
P3d 102 (2001). The Bar must, however, sufficiently allege
facts in connection with the charged allegation. Compare
In re Albrecht, 333 Or 520, 544, 544 n 20, 42 P3d 887 (2002)
(rejecting argument that complaint insufficiently alleged
conversion for lawyer’s own use because one aspect of alle-
gation described and alleged that type of conversion), with
In re Spencer, 355 Or 679, 689, 30 P3d 538 (2014) (court did
not address theory of “personal interest” not alleged as con-
flict of interest violation), and Magar, 296 Or at 803, 806 n 3
(Disciplinary Board erred in basing rule violation on cer-
tain aspects of problematic client representation not alleged
or described in complaint), and In re Lasswell, 296 Or 121,
128, 673 P2d 855 (1983) (Disciplinary Board erred in basing
rule violation concerning prosecutor’s extrajudicial state-
ments on particular events not charged in complaint; only
factual event described in complaint provided basis to ana-
lyze alleged rule violation). See also State ex rel Currin v.
Comm’n on Judicial Fitness, 311 Or 530, 533, 815 P2d 212
(1991) (adequate notice is necessary component of due pro-
cess); In re Chambers, 292 Or 670, 676, 642 P2d 286 (1982)
(trial panel erred in reaching guilt determination as to mis-
representation; although proof supported panel’s determina-
tion, complaint contained no allegation putting lawyer on
notice that being charged with misrepresentation).
As discussed earlier, in this case, the Bar’s second
cause alleged conflicts of interest among the accuseds’ cur-
rent clients during the SEC investigation. That cause con-
tained one allegation that—in isolation—arguably could be
Cite as 356 691 (2015) 739
read to encompass Rosenbaum’s October 3, 2002, phone call
to the SEC:
“Represented by [Rosenbaum] and Ellis, FLIR agreed
to cooperate fully with the SEC in its investigation and
revealed to the SEC information that implicated *  * *
Samper * * * as responsible for the misstatement of FLIR’s
1998 and 1999 financial status and for FLIR’s accounting,
record-keeping, and financial reporting practices in 1998
and 1999.”
(Emphasis added.) When read in its entirety, however, the
unmistakable purpose of the second cause was to allege mis-
conduct—including FLIR’s alleged revealing to the SEC of
information unfavorable to Samper and others—occurring
within a particular time frame that began with the spe-
cial committee’s determinations by summer 2000, contin-
ued through the SEC investigation and interviews in 2000
and 2001, and ended in March 2002 with FLIR’s filing of
its Wells Submission. Rosenbaum’s phone call to the SEC
occurred on October 3, 2002, after the SEC’s judgments
against FLIR and Samper had been entered, and well after
the time frame referred to in the Bar’s second cause. That
cause therefore did not sufficiently allege facts to permit
Rosenbaum “to know the nature of the charge * * * against
[her],” BR 4.1(c), respecting any implication flowing from
her phone call to the SEC. The trial panel erred in conclud-
ing otherwise.41
V.  TENTH CAUSE (ELLIS ONLY)—FORMER
DR 5-105(C), FORMER-CLIENT LIKELY CONFLICT
DURING FITZHENRY BAR MATTER
A.  Trial Panel Decision and Parties’ Contentions on Review
The tenth cause against Ellis alleged that Ellis’s rep-
resentation of Fitzhenry in his Bar matter after the Daltry
41
As noted earlier, 356 Or at ___ n 40, the trial panel invoked ORCP 23 B
in determining that Rosenbaum’s October 3, 2002, phone call to the SEC showed
that a likely conflict of interest existed between FLIR and Wynne, and Samper.
This court never has concluded that ORCP 23 B applies in Bar proceedings, and
nothing in the Bar Rules of Procedure suggests that application of ORCP 23 B is
permitted or appropriate. By contrast, as explained above, the Bar Rules require
that the complaint notify the accused lawyer of the alleged misconduct at issue.
740 In re Ellis / Rosenbaum
and Samper SEC representations had ended—including
continuing to assert on Fitzhenry’s behalf that he had relied
on Daltry’s and Samper’s assurances when signing the 1999
management representation letter that also had been at
issue in the SEC proceeding—amounted to a former-client
conflict of interest under former DR 5-105(C) that Ellis had
been obligated to disclose to both Daltry and Samper, so as
to obtain their consent to his representation of Fitzhenry.
The trial panel concluded that the Bar did not prove that
Ellis’s representation of Fitzhenry was or was likely to be
adverse to Daltry’s or Samper’s interests in the DOJ inves-
tigation, and, therefore, no conflict existed. The Bar chal-
lenges that conclusion on review. Ellis first responds by
emphasizing that the Bar’s allegation focuses on Fitzhenry’s
trial panel hearing and review in this court, which occurred
after the Rules of Professional Conduct replaced the for-
mer Code of Professional Responsibility. Fitzhenry, 343 Or
at 88 n 1. Because the Bar charged only violations under
the former Code of Professional Responsibility, Ellis argues
that we should dismiss the allegations under this cause.
Alternatively, Ellis argues that the Bar failed to prove that
any former-client likely conflict of interest existed under for-
mer DR 5-105(C) because it failed to prove that the SEC and
Bar matters were significantly related or that the interests
of the various clients were adverse.42
B.  Adoption of Oregon Rules of Professional Conduct in
2005 Narrowed Scope of Misconduct Alleged Under
Tenth Cause
We begin with Ellis’s argument about the scope
of the Bar’s allegations under the former rules. We agree
that former DR 5-105(C) did not apply to misconduct alleged
to have occurred on or after January 1, 2005, the effective
date for the Oregon Rules of Professional Conduct. See In re
42
The Bar’s complaint had alleged an “actual or likely” former-client conflict
under this cause. The trial panel determined that the Bar did not prove that
Ellis’s representation of Fitzhenry in the Bar matter “was or was likely to be
adverse to the objective interests of Samper and Daltry” in the DOJ investiga-
tion. On review, the Bar asserts the existence of a “conflict.” Because the Bar’s
argument is limited to the question of adversity and does not mention any obli-
gation on Ellis’s part to contend for competing client positions, we analyze only
whether a likely conflict of interest existed.
Cite as 356 691 (2015) 741
Hartfield, 349 Or 108, 115 n 4, 239 P3d 992 (2010) (although
accused lawyer began representing client in 2003, before
effective date of Rules of Professional Conduct, misconduct
at issue occurred after that date, so new rules applied);
Hostetter, 348 Or at 576 n 1 (alleged misconduct occurred
both before and after January 1, 2005; former disciplinary
rules applied to conduct alleged before the date, and new
rules applied to conduct alleged on or after that date). We
disagree, however, that the entirety of the tenth cause
alleged misconduct occurring only after the effective date of
the new rules.
The ninth cause against Ellis—which is not at issue
here—alleged current-client conflicts between Fitzhenry, on
the one hand, and Daltry and Samper on the other, arising
from Ellis’s representation of Fitzhenry in his Bar matter
from July 2002 up to the issuance of this court’s decision in
Fitzhenry, 343 Or 86, in 2007. That cause included an alle-
gation that, as part of Fitzhenry’s defense, Ellis knowingly
made representations on Fitzhenry’s behalf that conflicted
with the interests of former clients Daltry and Samper.
The tenth cause realleged and incorporated by reference
those same facts and then further alleged that (1) after late
September 2002, the accuseds’ representation of Daltry and
Samper ended, but Ellis continued to represent Fitzhenry in
the Bar matter; (2) from the formal prehearing phase through
the appellate review proceedings—which all occurred after
January 1, 2005—Ellis knowingly made representations on
Fitzhenry’s behalf that conflicted his former clients’ inter-
ests; and (3) throughout Ellis’s continuing representation of
Fitzhenry once Daltry and Samper became former clients, a
former-client conflict existed. Collectively, those allegations
in the tenth cause asserted continuing misconduct through-
out the entirety of the Fitzhenry Bar representation once
Daltry and Samper became former clients; the allegations
were not limited to Ellis’s work relating to the trial panel
hearing and appellate review that occurred after January 1,
2005. We therefore must determine whether the Bar proved
by clear and convincing evidence that Ellis’s representa-
tion of Fitzhenry in the Bar matter before that date posed
a likely conflict of interest with former clients Daltry and
Samper under former DR 5-105(C).
742 In re Ellis / Rosenbaum
C.  No Former-Client Likely Conflict of Interest During
Fitzhenry Bar Matter
The central facts predating January 1, 2005, are as
follows. In late November 2002, at Fitzhenry’s request, Ellis
wrote to the Bar, sending Fitzhenry’s SEC settlement order
and reiterating Fitzhenry’s position that he had relied on
FLIR’s CEO (Stringer) and CFO (Samper) in signing the
1999 management representation letter. Ellis wrote the Bar
again in December 2002, responding to a Bar inquiry and
sending additional materials, including Fitzhenry’s Wells
Submission and SEC interview transcripts; that letter reit-
erated that Fitzhenry had intended to confirm only the legal
representations in the 1999 management representation let-
ter and inferred that he had relied on Samper and others as
to the accounting representations. That second letter to the
Bar also stated that, before signing the 1999 management
representation letter, Fitzhenry specifically had confirmed
with Samper that the information in the letter was accu-
rate. At the time that Ellis sent those letters, the SEC set-
tlements had been finalized, and Ellis had no knowledge of
any pending DOJ investigation.
Former DR 5-105(C) prohibited representation of a
new client “in the same or a significantly related matter”
when the interests of the new client and a former client
“are in actual or likely conflict,” unless consent is obtained
after full disclosure. As to the first requirement, a matter
is “significantly related” if representation of the new cli-
ent “would, or would likely, inflict injury or damage upon
the former client in connection with any proceeding, claim,
controversy, * * * investigation, charge, accusation, * * * or
other particular matter in which the lawyer previously rep-
resented the former client[.]” Former DR 5-105(C)(1).43 As
to the second requirement, as discussed earlier, former DR
5-105(A)(2) defined a likely conflict as a situation in which
43
The quoted definition refers to a “matter-specific” conflict. Hostetter, 348
Or at 586. Former DR 5-105(C)(2) alternatively defined a “significantly related
matter” in terms of being “information-specific,” that is, that the former client
representation provided the lawyer with confidences or secrets, the use of which
“would, or would likely, inflict injury or damage upon the former client in the
course of the subsequent matter.” See Hostetter, 348 Or at 586 (so identifying that
type of conflict). Here, the Bar argues only that a matter-specific conflict existed.
Cite as 356 691 (2015) 743
the current and former clients’ objective personal, business,
or property interests “are adverse.”44 Here, the Bar asserts
that it satisfied the “same or significantly related matter”
requirement because the Fitzhenry Bar matter arose out of
the same facts and circumstances as those at issue in the
SEC proceeding, regarding the 1999 management represen-
tation letter. Ellis disagrees that the Bar satisfied either the
“same or significantly related matter” requirement or the
separate “adversity” requirement.
We agree with Ellis that the Bar did not prove by
clear and convincing evidence that the “significantly related
matter” requirement of former DR 5-105(C)(1) was satisfied
and, therefore, did not prove that the former-client conflicts
prohibition set out in former DR 5-105(C) applied to Ellis’s
representation of Fitzhenry in the Bar matter. On that
point, the question is not whether Fitzhenry’s Bar matter
involved many of the same facts as the SEC investigation;
it indisputably did. Rather, the question is whether Ellis’s
representation of Fitzhenry in the Bar matter would or
would likely have inflicted injury or damage on Daltry’s or
Samper’s interests in connection with the SEC investigation.
See Hostetter, 348 Or at 588 (“significantly related” require-
ment focuses on injury or damage to former client’s interests
in connection with earlier representation, not injury to for-
mer client in abstract sense).
Three factors prompt us to conclude that no such
likelihood existed here. First, at the time when Ellis wrote
his letters to the Bar on Fitzhenry’s behalf, the SEC inves-
tigation had ended, and Samper’s settlement and the SEC’s
judgment against him—which had incorporated Samper’s
execution of a Consent to Entry of Judgment that included
SEC findings of fraud—had been entered; Daltry, mean-
while, had no need to settle with the SEC, because he had
not been the subject of a civil enforcement action. Nothing
in the record supports a determination that Ellis’s repre-
sentation of Fitzhenry in the Bar matter—which concerned
44
We note that former DR 5-105(C) particularly frames the former-client con-
flict inquiry in terms of whether “the interests of the current and former clients
are in actual or likely conflict” (emphasis added), whereas former DR 5-105(A)(2)
served to define a “likely conflict of interest” in terms of a scenario in which the
objective interests of the clients “are adverse.”
744 In re Ellis / Rosenbaum
solely a professional licensing consequence for Fitzhenry,
relating to his conduct as FLIR’s General Counsel, and
had no implications for either Samper or Daltry—would or
would likely have inflicted injury or damage on those for-
mer clients in connection with an SEC investigation that
had ended. Second, Ellis’s letters to the Bar asserted a gen-
eral position on Fitzhenry’s behalf that was consistent with
Samper’s own SEC testimony, in that Samper had acknowl-
edged to the SEC that he as CFO had been responsible for
FLIR’s accounting; that position therefore was not likely to
inflict on Samper any injury or damage in connection with
the SEC proceeding in any event. And third, Kaner testified
that it was customary and expected for General Counsel
such as Fitzhenry to rely on the representations of others—
including the CFO—in signing management representation
letters and that Kaner never had concluded that Ellis’s rep-
resentation of Fitzhenry in the Bar matter had inflicted any
injury on Samper’s interests. No countering evidence in the
record persuades us that Ellis’s representation of Fitzhenry
in his Bar matter would or would likely have inflicted injury
or damage on either Samper’s or Daltry’s interests in con-
nection with the SEC investigation. It follows that, because
Fitzhenry’s Bar matter did not involve “the same or signifi-
cantly related matter” as defined in former DR 5-105(C)(1),
the trial panel correctly determined that no former-client
likely conflict of interest existed under former DR 5-105(C).
VI.  TENTH AND TWELFTH CAUSES—FORMER
DR 5-105(C) AND FORMER DR 1-102(A)(3),
FORMER-CLIENT LIKELY CONFLICTS AND
MISREPRESENTATION BY OMISSION
DURING DOJ REPRESENTATION
A.  Former-Client Likely Conflicts of Interest
1.  Additional Facts
The Bar’s tenth (Rosenbaum) and twelfth (Ellis)
causes alleged conflicts between FLIR on the one hand, and
Daltry and Samper on the other, during the DOJ investiga-
tion. To more fully understand the parties’ arguments and
the trial panel’s decision under those causes, we first provide
a more detailed summary of the underlying facts.
Cite as 356 691 (2015) 745
Shortly after learning about the DOJ investigation,
the accuseds met with Assistant United States Attorney
Garten on January 30, 2003. Garten told the accuseds that
he did not intend to target FLIR; he also gave them a DOJ
memorandum that, among other things, noted that com-
pany cooperation with the DOJ was one of many factors for
the DOJ to consider in deciding whether to seek corporate
fraud charges. The accuseds had told Glade, Kaner, and
Neil about the meeting beforehand; the day after the meet-
ing, the accuseds relayed the meeting discussion to Kaner,
and Rosenbaum faxed the DOJ memorandum to Kaner. The
accuseds attempted to contact Daltry but were unable to
reach him until late February.
The DOJ began requesting FLIR documents imme-
diately. On January 31, 2003, at FLIR’s direction, Stoel Rives
sent to the FBI redacted documentation relating to the 2000
FLIR special committee investigation, which previously had
been provided to the SEC. Stoel Rives sent a second group
of related documents two weeks later that contained the
redacted material, which—consistently with Wynne’s testi-
mony in the SEC investigation—had characterized FLIR’s
accounting errors as involving some competence issues on
Samper’s part, but not fraud.
On February 4, 2003, Garten and Rosenbaum met
by phone. Garten identified Stringer, Samper, Eagleburger,
and Martin as potential criminal defendants. Rosenbaum
relayed that conversation to Glade and Kaner. The follow-
ing week, in a meeting involving Garten, Ellis, Wynne,
and Lewis, Lewis told Garten that FLIR would cooperate
with the criminal investigation. In addition to FLIR’s coop-
eration, however, Garten wanted the accuseds to help him
develop evidence against individual potential defendants.
Afterwards, Ellis told Wynne and Lewis that Stoel Rives
ethically could not cooperate in the manner that Garten had
requested.
On February 14, 2003, Garten wrote to the accuseds,
requesting that FLIR provide its annual reports, certain
SEC filings, bank documents, and compensation history for
certain individuals, and also requesting that FLIR coordi-
nate DOJ interviews of current and former FLIR personnel.
746 In re Ellis / Rosenbaum
Garten’s letter also stated, consistently with the DOJ memo-
randum, that the DOJ’s “assessment of the extent of [FLIR’s]
cooperation will be a function, in part, of how proactive [the
accuseds] are in assisting us with our proof against the for-
mer employees identified in the SEC complaint.”45 That part
of the letter distressed both accuseds, because they under-
stood it to expressly request their personal assistance in
developing a criminal case against former clients. They theo-
rized that Garten’s request ultimately might harm Garten’s
position because, if such a course were pursued, the federal
prosecution could be tainted due to attorney-client privilege
and fiduciary obligation violations. Rosenbaum wrote to
Garten, stating that the accuseds’ earlier client represen-
tations limited their potential actions in the DOJ investi-
gation. The accuseds did not send a copy of either Garten’s
letter or Rosenbaum’s response to Daltry, Samper, Glade, or
Kaner, because they did not intend to assist in the manner
requested, although they did send Garten’s letter to FLIR
and began collecting the requested documentation.
The accuseds met with Garten on February 19,
2003. Garten now acknowledged that the accuseds’ earlier
representations limited their ability to cooperate. Garten
also stated that he might not pursue a case against Daltry
or Fitzhenry if they cooperated, but the same was not true
for Samper. He also stated that Stringer, Martin, Samper,
Fitzhenry, and Eagleburger all would need lawyers, although
45
Garten’s February 14, 2003, letter further stated that, “[i]n this case,
[FLIR] seeks immunity from prosecution.” At the trial panel hearing, however,
the accuseds introduced an April 2011 declaration from Garten clarifying that
that statement was meant to express Garten’s understanding from Wynne that
FLIR had been willing at the outset to cooperate with the criminal investigation.
Garten’s declaration also stated that, to the best of his recollection, the issue of
FLIR seeking immunity never arose and was not discussed either formally or
informally.
We note that, generally speaking, an immunity or nonprosecution agree-
ment involves a promise that the defendant will be immune from prosecution
“in exchange for providing information or otherwise assisting the government.”
Nancy Hollander, Barbara E. Bergman, and Melissa Stephenson, 1 Wharton’s
Criminal Procedure § 1:8 n 1 (14th ed 2010). Such an arrangement is not the
same as a decision on the prosecution’s part not to prosecute a particular poten-
tial defendant; instead, the former requires a meeting of the minds between the
parties. Cf. United States v. Wilson, 392 F3d 1055, 1059-60 (9th Cir 2004) (con-
tract principles apply to claimed immunity agreements, including requirement
that prosecution objectively offered or promised immunity in exchange for some
consideration).
Cite as 356 691 (2015) 747
he did not yet know about Daltry. In discussing what FLIR
could tell its customers, Garten stated that they could be told
that the DOJ was focusing on individuals involved in the 1998
and 1999 accounting issues, and that FLIR had been assured
that—provided that it cooperated—it would not be subject to
criminal prosecution. Neither accused understood that state-
ment to mean that FLIR effectively had promised cooper-
ation in exchange for immunity from prosecution; instead,
they understood it to be a direction from Garten about
what customers could be told.46 Garten sent the accuseds
a confirming e-mail later that day, essentially stating that
he was abandoning his request for their personal coopera-
tion because upcoming witness interviews might implicate
their former clients Daltry, Samper, and Eagleburger. His
e-mail also requested the accuseds’ assistance in schedul-
ing witness interviews and reiterated his earlier document
production request. Thereafter, the accuseds had no direct
contact with Garten or any involvement in the criminal case
other than document production and witness scheduling.
Rosenbaum told Glade about their meeting with Garten that
same day. Also on that date, Stoel Rives sent a third group
of documents to the DOJ, consisting of pleadings from the
public record in the class action litigation.
The next day, Rosenbaum wrote to Glade, con-
firming that FLIR was not a DOJ target and that Samper
and others, including Daltry, Fitzhenry, and Eagleburger,
might need criminal lawyers. The letter also stated that the
accuseds expected to continue to assist FLIR with document
production and to make witnesses available for interviews.
Rosenbaum sent a similar letter to Eagleburger’s lawyer,
Neil, the next day. The record contains no indication that
Glade, Kaner, or Neil objected to the accuseds’ ongoing doc-
ument production and assistance with witness scheduling.
The following day, Stoel Rives provided Muessle’s
evaluation documentation to the DOJ (previously provided
to the SEC), as well as hundreds of other documents, which
appear to have consisted entirely of public FLIR securities
filings. And, a few days later, Rosenbaum sent Garten the
46
As noted above, Garten’s April 2011 declaration similarly confirmed that
Garten had no understanding in 2003 that the DOJ had discussed any formal or
informal immunity arrangement for FLIR.
748 In re Ellis / Rosenbaum
requested compensation data for Daltry and Fitzhenry,
obtained from certain public FLIR filings. At some point,
after coordinating with Rosenbaum, Muessle also sent
Garten the requested compensation data for Samper, which
Muessle had separately compiled. It appears from the record
that, although the compensation data for certain directors
and officers other than Samper had been publicly avail-
able, none of the compensation information transmitted to
Garten previously had been produced to the SEC by FLIR.
The record also shows, however, that Glade and Kaner pre-
viously had submitted Samper’s compensation information
to the SEC in response to a subpoena directed to Samper.
Meanwhile, Rosenbaum had been trying for sev-
eral weeks to reach Daltry. Rosenbaum and Daltry spoke
on February 24, 2003, and she recommended that he retain
criminal defense counsel. Daltry immediately retained
Myers, and Rosenbaum then told Myers that Garten was
requesting FLIR documents from the dates pertaining to
the SEC investigation, that some documents were beyond
the scope of the SEC investigation,47 that Garten did not
intend to charge FLIR, and that Garten was inclined to
give Daltry immunity if he cooperated. The next day, Ellis
reiterated to Myers that Garten had asked FLIR to produce
documents, and Myers understood that the documents were
being produced accordingly. Myers did not object to the doc-
ument production.
In late February 2003, Wynne met separately with
Garten, in part to reiterate FLIR’s intent to cooperate.
Afterwards, Wynne proposed to the accuseds that FLIR
retain separate counsel as to the DOJ investigation but that
the accuseds continue to serve as FLIR’s document depos-
itory and to schedule witnesses. In proposing that limited
representation, which Garten had approved, Wynne rea-
soned that the accuseds were the most familiar with all the
pertinent documentation and witness contact information,
and that FLIR could leverage Stoel Rives’s extensive prior
cataloging of FLIR’s documents—as well as its FLIR docu-
ment database—relating to the SEC investigation, thereby
47
Myers testified that, although he could not specifically recall, Rosenbaum
also may have told him that requested documents already had been provided to
the DOJ.
Cite as 356 691 (2015) 749
significantly reducing the cost to FLIR and ensuring a more
timely and efficient response to the DOJ.
The accuseds asked a partner and in-house ethics
expert whether Wynne’s request for limited representation
required consent from their former clients. The three deter-
mined that consent was unnecessary because the arrange-
ment did not involve any conflict of interest that must be
disclosed, but the partner nonetheless suggested that the
accuseds seek consent. Rosenbaum drafted a disclosure and
consent letter, incorporating some input from the partner;
Ellis also reviewed and approved the letter.
Rosenbaum sent the disclosure letter, dated March 3,
2003, to FLIR and to Daltry, Samper, and Eagleburger, in
care of their individual counsel and also Samper’s separately
retained criminal defense counsel. The letter explained:
• FLIR had been told that it was not the DOJ’s
focus and did not expect to be a defendant,
and it had waived its attorney-client privilege
with Stoel Rives for an identified time period;
• Stoel Rives had been asked to advise FLIR,
which was cooperating with the DOJ investiga-
tion, and to assist FLIR in producing documents
and arranging for witnesses to be interviewed;
• The criminal investigation related to the accuseds’
earlier representations of Daltry, Samper, and
Eagleburger, and had potentially adverse conse-
quences to them;
• The accuseds had informed FLIR and the DOJ
that Stoel Rives could cooperate only to the
extent consistent with obligations arising from
their past representations;
• The accuseds had met with an Assistant United
States Attorney but did not intend to have fur-
ther contact, other than facilitating document
production and interview scheduling;
• The accuseds would not voluntarily disclose cli-
ent confidences or affirmatively assist the DOJ in
developing its case;
750 In re Ellis / Rosenbaum
• Stoel Rives would not voluntarily produce infor-
mation or materials arguably subject to claims of
confidentiality, and Stoel Rives would inform the
recipient’s counsel of any DOJ request for such
materials so that counsel could object if desired;
• In deciding whether to consent, the recipients
should consider how the accuseds’ representation
of FLIR respecting the DOJ investigation would
affect them;
• In the accuseds’ assessment, the risk to the recip-
ients from their limited representation of FLIR
was “very small”; and
• Each recipient each should “review these matters
carefully and for yourself” and seek advice from
independent counsel to assist in determining
whether to consent to the limited representation.
Daltry consented after consulting with Myers,
conditioned on Myers’s understanding that the accuseds
would only produce documents and arrange interviews.48
Eagleburger also consented, and Samper consented after
consulting counsel, although six weeks elapsed between the
date of Rosenbaum’s letter and receipt of Samper’s returned
letter, signed by Samper and confirmed by Glade. In confirm-
ing Samper’s consent, Glade further confirmed his under-
standing that Stoel Rives already was producing documents
to the DOJ. In the meantime, the accuseds arranged for fur-
ther witness interviews and produced more documents. For
its part, FLIR retained other counsel to represent it in other
aspects of the DOJ investigation—specifically, FLIR’s ongo-
ing cooperation therewith.
2.  Trial Panel Decision and Parties’ Contentions
In the ninth (Rosenbaum) and eleventh (Ellis) causes,
the complaints alleged violations of former DR 5-105(E)
48
Myers expressly had conditioned Daltry’s consent because he wanted to
confirm that the representation would be narrow, limited to document produc-
tion and witness scheduling only. In that regard, the Bar raises issues on review
about the note in Rosenbaum’ s letter that the accuseds would be “advising”
FLIR. On review of the record as a whole, however, we find that the accuseds’
limited representation of FLIR during the DOJ investigation was intended to—
and did—extend to document production and witness scheduling only.
Cite as 356 691 (2015) 751
(current-client conflicts), arising from the accuseds’ limited
representation of FLIR during the DOJ investigation. The
complaints alternatively alleged, in the tenth (Rosenbaum)
and twelfth (Ellis) causes, that the same conduct violated
former DR 5-105(C) (former-client conflicts). Specifically, the
complaints alleged that FLIR’s interests at that time con-
flicted with the interests of current or former clients Daltry
and Samper, and that Rosenbaum’s March 3, 2003, letter
insufficiently disclosed the nature of those conflicting inter-
ests in seeking consent to the limited representation.49
The trial panel addressed the identified conflict alle-
gations primarily under former DR 5-105(E) (current clients),
as set out in the ninth and eleventh causes. The panel did
not determine whether “actual,” as opposed to “likely,” con-
flicts existed and instead identified the question as whether
“an actual or likely conflict” existed that required full dis-
closure under former DR 10-101(B). The panel ultimately
determined that the accuseds had not made full disclosure
to Daltry and Samper in Rosenbaum’s March 3, 2003, letter
so as to obtain those former clients’ informed consent to the
accuseds’ representation of FLIR in the DOJ investigation.
The panel expressly identified certain information that—in
its view—the accuseds should have disclosed; we discuss
that determination in greater detail later in this opinion. In
the panel’s view, the accuseds’ failure to disclose the identi-
fied information violated former DR 5-105(E) (current-client
likely conflicts, insufficient disclosure). The panel similarly
and briefly determined that the Bar also had proved the
alternatively alleged tenth and twelfth causes under former
DR 5-105(C) (former-client conflicts).
On review, the accuseds first argue that the trial
panel erroneously concluded that they should have dis-
closed certain information that the Bar did not identify in
its complaints. Otherwise, the accuseds argue that—given
the limited nature of their representation of FLIR during
the DOJ investigation—no conflict of interest existed that
required any disclosure and, alternatively, even if a conflict
49
All those same causes further alleged that Rosenbaum’s letter violated for-
mer DR 1-102(A)(3) (misrepresentation by omission), which we briefly discuss in
the next section of the opinion.
752 In re Ellis / Rosenbaum
did exist, their disclosure in Rosenbaum’s March 3, 2003,
letter was sufficient. For its part, the Bar agrees with the
panel about the insufficient disclosure; it also more fully
argues why the accuseds’ limited representation of FLIR
triggered the former-client likely conflict prohibition in for-
mer DR 5-105(C) as to Daltry and Samper, as alleged in the
tenth and twelfth causes. (The Bar raises no current-client
conflict allegations on review.)
3. Assessment of Former-Client Likely Conflict
Arising From Limited Representation During DOJ
Investigation
We begin with the threshold question whether for-
mer DR 5-105(C) applied to the accuseds’ limited represen-
tation of FLIR in the DOJ investigation, so as to trigger the
“full disclosure” and consent requirements of former DR
5-105(D) and former DR 10-101(B).50 As explained earlier,
among other things, former DR 5-105(C) prohibits a lawyer
who previously represented a former client from represent-
ing a new client when (1) the new representation involves
a “significantly related matter;” and (2) the current and
former clients’ interests are in likely conflict. Here, the
accuseds do not dispute that their limited representation of
FLIR in the DOJ investigation likely satisfied the “signifi-
cantly related matter” requirement; indeed, their March 3,
2003, letter acknowledged as much.51 Instead, they argue
that the Bar did not satisfy the second requirement—that
is, the Bar did not show that the interests of FLIR and for-
mer clients Daltry and Samper were in likely conflict at the
outset of the limited representation. As to that question, the
Bar was required to prove that the objective personal, busi-
ness, or property interests of FLIR, on the one hand, and
Daltry and Samper on the other, were adverse at the time in
question. Former DR 5-105(A)(2).
50
As the accuseds note on review, the trial panel did not make any express
finding about the existence of a prohibited former-client conflict under former DR
5-105(C). Instead, the panel focused on the accuseds’ March 3, 2003, disclosure
letter and determined that the accuseds had violated former DR 5-105(C) because
the consent that they obtained under former DR 5-105(D), which permitted the
representation, was invalid due to lack of full disclosure.
51
We accept the accuseds’ concession and do not separately analyze whether
the Bar satisfied the “significantly related matter” requirement under former DR
5-105(C).
Cite as 356 691 (2015) 753
In the context of assessing whether a former-client
likely conflict exists under former DR 5-105(C), this court
has set out the following analysis. First, a lawyer faced with
a potential conflict must assess “the former client’s interests
that pertain to the matter in which the lawyer previously rep-
resented the former client.” Hostetter, 348 Or at 584 (empha-
sis added). After identifying the former clients’ interests
as described, the lawyer must determine whether—at the
time of seeking to undertake the new representation—the
former client’s interests “are adverse to the current client
during the subsequent representation.” Id. at 594. That is,
the question is not whether the former client has a current,
independent interest that is adverse to the current client’s
interest in the new representation; instead, the question is
whether the former client’s interest in relation to the earlier
representation is adverse to the current client’s interest in
the new representation.
This court’s case law illustrates application of
that framework. For example, in Hostetter, 348 Or 574, the
accused lawyer had drafted loan documents for a former cli-
ent. The former client later died, and the lawyer then rep-
resented the lender in a claim against the former client’s
estate. Id. at 577. The central question as to adversity was
whether the former client’s “interest” had survived her
death, so as to establish a likely conflict under former DR
5-105(C). Id. at 581-82. After determining that the former
client’s interest did survive, the court identified her interest
in the earlier representation as being one of a debtor, with
an interest in minimizing her legal debt to the extent legally
possible and reasonable. By contrast, the lender’s interest in
the new representation was to collect as much as possible
from the estate. Id. at 593. By their nature, those interests
were “different” and “adverse,” and therefore amounted to a
likely conflict of interest. Id.
Similarly, in In re Brandsness, 299 Or 420, 702 P2d
1098 (1985), the lawyer previously had represented a hus-
band and wife in a business venture and also had drafted
their wills. After both the venture and the marriage soured,
the wife rewrote her will with the assistance of a different
lawyer and also hired her own business lawyer. The husband
754 In re Ellis / Rosenbaum
subsequently asked the original lawyer to represent him in
a dissolution proceeding, in which the use and division of
assets and liabilities from the business were at issue. Id. at
422-23. The court assessed the wife’s interest in the context
of the earlier business representation and determined that
the dissolution proceeding—in which the necessary “focal
point” had been the couple’s business—”created an adverse
relationship” between the former and present clients. Id. at
429; see also Cobb, 345 Or at 133-34 (investor clients’ inter-
ests not adverse to principal company’s interest at point in
time when all parties sought to dismiss underlying bank-
ruptcy proceeding to protect certain assets in which all
shared an interest; interests diverged later, when it became
clear that investors—now former clients—would become
company’s creditors in bankruptcy).
Applying that framework to the Bar’s allegations
here, we begin by identifying the interests of the accuseds’
former clients Daltry and Samper in relation to the accuseds’
earlier representation of them during the SEC investigation.
Daltry’s and Samper’s most pressing interests during the
SEC investigation had been to avoid individual process vio-
lations, to avoid individual SEC civil enforcement actions,
and—as to Samper once the SEC filed an enforcement action
against him—to mitigate the potential negative results
of that action. Daltry and Samper also shared an inter-
est in having the accuseds protect their client confidences
obtained during the course of the earlier representation.
Additionally, Daltry and Samper had an interest during the
course of the SEC investigation to minimize other potential
negative consequences that might flow to them as a result of
the investigation.
Next, we identify the interest of FLIR in the new,
limited representation in the DOJ investigation. As noted,
Garten told the accuseds at the outset that he did not
intend to target FLIR but instead was focused on potential
charges against several individuals, including Samper and
perhaps Daltry. In general, then, FLIR’s role at the outset
of that representation was to serve as a potential govern-
mental witness in a criminal investigation. In the context of
the accuseds’ agreed-upon limited representation, however,
Cite as 356 691 (2015) 755
FLIR’s interest was narrow: Essentially, FLIR had an inter-
est in demonstrating its willingness to cooperate with the
DOJ investigation by responding quickly and accurately to
documentation requests and efficiently assisting with sched-
uling witness interviews. Relatedly, FLIR had an interest in
controlling its cost of cooperating by having lawyers famil-
iar with FLIR’s extensive SEC documentation and Stoel
Rives’s FLIR document database facilitate the DOJ docu-
ment production.52
Having identified the client interests involved, we
now discuss whether those interests were adverse when the
accuseds agreed to undertake the limited representation of
FLIR during the DOJ investigation. On one hand—unlike
the factual scenarios in Hostetter and Brandsness—Daltry’s
and Samper’s self-protective interests in relation to the ear-
lier representation effectively had ended, because the new
representation commenced after the SEC proceeding had
ended and the ensuing judgments entered, thereby resolv-
ing Daltry’s and Samper’s interests in avoiding process vio-
lation charges and SEC enforcement actions. And, nothing
about FLIR’s narrow interest in cooperating with DOJ doc-
ument requests and witness interview scheduling, or in con-
trolling its costs, was adverse to those particular interests of
Daltry and Samper in the earlier SEC representation.53
The same cannot necessarily be said, however, as to
Daltry’s and Samper’s interests during the SEC investigation
52
As part of identifying the client interests at stake, the Bar thinks it sig-
nificant that FLIR had secured some sort of immunity arrangement—even if
informal—with the DOJ, such that the DOJ would not prosecute FLIR so long as
it cooperated in the investigation. The Bar did not prove by clear and convincing
evidence, however, that any such arrangement was made. See 356 Or at ___ n 45
(noting requirements for immunity or nonprosecution agreement). Indeed, the
evidence shows that Garten had told FLIR at the outset that it was not a target,
and Garten later attested that no formal or informal immunity arrangement had
been discussed. See id. (discussing contents of Garten declaration about nature
of discussions with FLIR).
53
As noted, Daltry and Samper also each had an interest in protecting pre-
viously disclosed client confidences, which continued to exist at the time of the
accuseds’ limited representation of FLIR. The Bar did not prove, however, that
any aspect of that personal interest was adverse to FLIR’s interest in the con-
text of the accuseds’ new limited representation of FLIR. Indeed, the accuseds
expressly told the former clients in Rosenbaum’s March 3, 2003, letter that under
no circumstances would the limited representation involve voluntary disclosure
of former client confidences.
756 In re Ellis / Rosenbaum
in mitigating against generally negative outcomes, such as
the future criminal investigation that materialized later
based on the same general facts. That particular interest
arguably continued even after the accuseds’ SEC represen-
tation of Daltry and Samper had ended, and it arguably was
inconsistent with FLIR’s interest in demonstrating cooper-
ation with the DOJ through efficient and responsive docu-
ment production and witness scheduling.54
Ultimately, it is a close question whether, at the
outset, the interests of Daltry and Samper identified above
were adverse to FLIR’s—particularly in the context of the
accuseds’ limited representation of FLIR. After reviewing
the record and considering the remainder of the parties’ argu-
ments, we assume without deciding that the Bar proved an
adversity of interests and, therefore, a likely conflict, under
former DR 5-105(C). We make that assumption because,
as explained below, our resolution of the Bar’s allegations
about the accuseds’ disclosure of the purported conflict—
so as to obtain their former clients’ consent to their lim-
ited representation of FLIR—resolves these causes in the
accuseds’ favor.55
54
In making that observation, we reiterate that the key inquiry under this
cause is whether the client’s respective interests as described above were adverse,
therefore presenting a likely conflict, at the outset of the DOJ investigation. The
Bar in large part focuses on Samper’s interests during the DOJ investigation; for
example, it relies on multiple purported facts that arose during that investiga-
tion—all occurring after the date of any fact alleged in the complaints—that pur-
port to show that the accuseds’ ongoing representation of FLIR in fact harmed
Samper in the DOJ proceeding and therefore must have been adverse to him.
As explained earlier, however, former DR 5-105(C) has two components: a
determination whether the new representation involves “the same or a signifi-
cantly related matter”; and a determination whether the interests were adverse
so as to show a likely conflict. The Bar’s argument about injury or harm to Samper
during the DOJ investigation certainly might pertain to the first requirement
(which, as noted, the accuseds concede was satisfied here for other reasons), but
does not pertain to the second. See former DR 5-105(C)(1) (defining “significantly
related” matter as scenario in which new representation would or would likely
inflict injury or damage on former client in connection with earlier representa-
tion); Hostetter, 348 Or at 594 (cautioning against conflating “adversity” with
“injury” for purposes of adversity requirement).
55
The Bar also argues that the accuseds cannot rely on their characteriza-
tion of their representation of FLIR as a “ministerial role” so as to be exempt from
the disciplinary rules. The accuseds do not argue, however, that their limited rep-
resentation rendered them exempt from the rules; instead, they argue that the
nature of their limited representation narrowed the scope of their client FLIR’s
interests in the DOJ investigation for purposes of applying the “likely conflict”
requirement of former DR 5-105(C).
Cite as 356 691 (2015) 757
4. Sufficient Disclosure of Former-Client Likely
Conflict, so as to Obtain Client Consent
As described earlier, the trial panel identified
certain information that it determined that the accuseds
should have disclosed in Rosenbaum’s March 3, 2003, let-
ter to Daltry and Samper, so as to satisfy the full disclo-
sure requirements of former DR 10-101(B). That infor-
mation included (1) a copy of Garten’s February 14, 2003,
letter requesting the accuseds’ personal cooperation with
the investigation; (2) the fact that Ellis was representing
Fitzhenry in the latter’s Bar matter; (3) the fact that Garten
had requested, and the accuseds had produced, officer com-
pensation information for Daltry and Samper; and (4) the
fact of an SEC investigation—purportedly with the accuseds’
assistance—of transactions previously not alleged, specif-
ically involving Rosenbaum’s October 2002 phone inquiry
about the Swedish Drop Shipment. The accuseds challenge
the panel’s determinations in two respects. First, they argue
that the Bar’s complaints did not allege that they had been
obligated to disclose most of the information that the panel
identified and that they therefore had no notice as to those
allegations. Alternatively, the accuseds argue that they sat-
isfied all full-disclosure requirements. The Bar responds
that the panel correctly determined that Rosenbaum’s
March 3, 2003, letter did not provide full disclosure to suffi-
ciently permit the accuseds’ former clients to consent to the
accuseds’ limited representation of FLIR during the DOJ
investigation.
We first briefly address the accuseds’ contentions
that the complaints did not allege that they were required
to disclose to former clients Daltry and Samper most of the
information that the trial panel determined should have
been disclosed. We agree with the accuseds that the com-
plaints did not allege that they should have provided Daltry
and Samper with a copy of Garten’s February 14, 2003,
As a general matter, limited representation of a client is permitted, see gen-
erally Cobb, 345 Or at 111 (recognizing lawyer’s representation of individual
investors for “specific limited purposes,” contrasted against serving as general
business counsel), and the record demonstrates that, after the accuseds agreed
to undertake the limited representation of FLIR, they accordingly limited their
involvement to document production and scheduling witness interviews.
758 In re Ellis / Rosenbaum
letter, and that they therefore had no notice of that spe-
cific purported misconduct. See 356 Or at ____ (describing
notice requirements in Bar proceedings). The complaints
did, however, allege that the accuseds should have disclosed
to Daltry and Samper “the nature or extent of Garten’s
demands for FLIR’s cooperation in the criminal case,” as
reflected in his February 14, 2003, letter. Given the relation-
ship between that allegation and the panel’s determination
that the accuseds should have provided Garten’s letter to
Daltry and Samper, we think that the panel’s determination
essentially amounted to a determination that the Bar had
proved its allegation about lack of disclosure respecting the
nature and extent of Garten’s demands. The Bar therefore
has sufficiently raised that question, as stated in its com-
plaints, on review.
As to Ellis’s representation of Fitzhenry in his Bar
matter, the accuseds emphasize that the trial panel com-
mented—in relation under the tenth and twelfth causes—
that Ellis should have obtained consent to that new rep-
resentation of Fitzhenry. The panel’s opinion does make
that observation; however, it also states that the accuseds
should have disclosed in Rosenbaum’s March 3, 2003, letter
to Daltry and Samper the fact that Ellis was representing
Fitzhenry in the Bar matter arising from related facts, so
that Daltry and Samper had sufficient information to con-
sent to the accuseds’ limited representation of FLIR. The
complaints contained that same disclosure allegation, and it
therefore is properly before us on review.
As to the trial panel’s determination that FLIR had
been asked to produce, and already had produced, compen-
sation information for Daltry and Samper, the accuseds are
correct that the tenth and twelfth causes did not allege that
they were required to disclose that specific information.
The complaints did, however, allege more generally that the
accuseds should have disclosed that they already had pro-
duced FLIR documents to the FBI. The panel’s more specific
determinations fell within that general allegation, which is
properly before us on review. We proceed to consider whether
Rosenbaum’s March 3, 2003, letter satisfied the accuseds’
full disclosure obligations.
Cite as 356 691 (2015) 759
Under former DR 10-101(B)(1), “ ‘Full disclosure’
means an explanation sufficient to apprise the recipient of
the potential adverse impact on the recipient, of the matter
to which the recipient is asked to consent.” This court has
explained that that rule requires an explanation provid-
ing sufficient detail to permit the recipient to understand
why it may be desirable to obtain independent counsel. In re
Boivin, 271 Or 419, 424, 533 P2d 171 (1975). Generally, such
an explanation must show the nature of the likely conflict
and apprise the client of the potential adverse consequences
of that conflict. In re Brandt/Griffin, 331 Or 113, 137, 10 P3d
906 (2000). In Brandt/Griffin, for example, the accused law-
yers sent a disclosure letter to a former client that contained
certain facts, but this court determined that the facts pro-
vided suggested that no conflict existed, whereas additional
facts—had they been disclosed—would have shown the true
divergence of the respective clients’ interests and explained
both the nature of the conflict and the adverse consequences
that might flow to the client being asked to provide consent.
Id.The requirement in former DR 10-101(B)(1) that
sufficient facts be disclosed does not, however, extend to “all
facts known to [the lawyer] that could be helpful to the for-
mer client.” Cobb, 345 Or at 135. In Cobb, discussed ear-
lier, the lawyer had represented some investor partnerships
in a company and also an entity associated with the com-
pany in different aspects of complex bankruptcy proceed-
ings, in which a trustee had been appointed to represent the
bankruptcy estate for the entity. Id. at 110-13. After it later
became apparent to the lawyer that he could not continue
to represent all the clients, he filed a motion to withdraw
accompanied by an affidavit disclosing certain facts. Id. at
113. The Bar contended that the affidavit should have dis-
closed that the investor partnerships had made certain pay-
ments to the lawyer and other related entities that instead
should have been made to the entity in bankruptcy. This
court disagreed, reasoning that the lawyer’s affidavit suffi-
ciently had notified the trustee “of the nature of the conflict,
i.e., that the interests of [the entity] and the investor part-
nerships could diverge and that he could not advocate for
both.” Id. at 135. The court further explained that, although
760 In re Ellis / Rosenbaum
the trustee might have benefitted—for purposes of marshal-
ling the entity’s assets—had the lawyer disclosed the pay-
ment information at issue, “that [was] not information that
the [lawyer] was required to disclose to comply with conflict
of interest rules.” Id.Cobb also demonstrates that, although “compli-
ance with the letter of the [disclosure] rule is required,” the
unique circumstances of a particular case may establish sat-
isfaction of certain aspects of the rule. Id. at 135-36. There,
at an earlier juncture in the case than the events described
above, the creator of the entity in bankruptcy instructed the
lawyer to withdraw, but the bankruptcy court wanted the
lawyer continue as local counsel. The lawyer sent disclosure
letters to all his clients, including to the creator and the
creator’s independent counsel; those letters did not formally
advise the entity to seek the advice of independent counsel
under former DR 10-101(B)(2). All clients consented. Later,
when the lawyer realized that an actual conflict had arisen
among his clients, he again sought to withdraw from rep-
resenting the entity (which the bankruptcy court allowed),
although he continued to represent the partnerships. Id. at
132-35. The Bar raised two arguments on review asserting
insufficient disclosure, which, as discussed below, this court
rejected.
First, the Bar argued that the lawyer’s initial dis-
closure letter to the entity had been insufficient because it
had failed to confirm in writing the lawyer’s recommenda-
tion that the client seek independent legal advice. This court
disagreed, reasoning that the lawyer had addressed his
disclosure letter to not only the entity’s creator but also to
three of the creator’s independent lawyers. When viewed in
that context, the content of the letter—including facts that
explained the potential conflict and its request for “advice
and assistance in determining the appropriate role for [the
lawyer] in these cases”—satisfied both the requirement and
purpose of the “written recommendation to seek indepen-
dent counsel advice” component of the disclosure rule, for-
mer DR 10-101(B)(2). Id. at 133.
Second, the Bar argued that, in the course of moving
to withdraw from representing the entity, the lawyer should
Cite as 356 691 (2015) 761
have advised the entity in writing—through the bankruptcy
trustee—to seek independent legal advice before consenting
to the lawyer’s withdrawal. Again, even after acknowledging
that compliance with “the letter of the rule is required,” id.
at 135, this court disagreed. In doing so, the court empha-
sized the “unique” circumstances of the case, in which the
court-appointed trustee—who was an experienced govern-
ment lawyer (and who had not been a client of the lawyer or
relied on his advice)—was the only person with authority to
decide whether to consent on behalf of the entity. In those
circumstances, the court determined that the lawyer had
not been required to advise the trustee to seek outside legal
advice on the entity’s behalf before consenting to the law-
yer’s withdrawal. Id. at 136.
We now apply the foregoing principles to determine
whether Rosenbaum’s March 3, 2003, letter to Daltry and
Samper satisfied the full disclosure requirements of former
DR 10-101(B)(1). At the outset, we reiterate that the nature
of the accuseds’ limited representation of FLIR in the DOJ
investigation consisted of only producing documents and
scheduling witnesses. Thus, the “matter to which [Daltry
and Samper were] asked to consent,” former DR 10-101(B)(1),
was only that limited representation. It follows that the
accuseds were required to provide an explanation sufficient
to both explain the nature of the conflict and to apprise
Daltry and Samper of the potential adverse impact on them
if the accuseds—on FLIR’s behalf—located FLIR documents
requested by the DOJ, reviewed them for privilege or confi-
dentiality issues, transmitted them to the DOJ or the FBI,
and scheduled witnesses for DOJ interviews. See Brandt/
Griffin, 331 Or at 136-37 (disclosed facts must show diver-
gence of respective clients’ interests and potential adverse
consequences).
We conclude that Rosenbaum’s March 3, 2003, let-
ter complied with former DR 10-101(B)(1). By disclosing that
the DOJ was investigating Samper and possibly Daltry in
a matter “significantly related” to the SEC investigation
that had potential adverse consequences to them,56 but that
56
Rosenbaum’s letter explained the “significantly related matter” component
of former DR 5-105(C) and stated that the DOJ investigation was a “related mat-
ter” for purposes of that rule.
762 In re Ellis / Rosenbaum
FLIR did not expect to be a defendant and was cooperating
with the investigation, the accuseds explained the diver-
gence of interests between their current and former clients,
as well as the nature of that conflict. By disclosing that they
had been asked to assist FLIR in producing documents and
arranging for witness interviews, the accuseds explained
both the nature of the limited representation and the poten-
tial adverse consequences to Daltry and Samper: As a result
of the representation, the accuseds would assist in produc-
ing FLIR documents that might help the DOJ build its case,
which ultimately might subject Daltry or Samper to crimi-
nal prosecution and penalties.57 Further, the letter explained
that the accuseds had informed FLIR and the DOJ that they
could cooperate only as consistent with their earlier repre-
sentational obligations, that they would not voluntarily pro-
duce any information or materials arguably subject to confi-
dentiality claims by Daltry or Samper, and that they would
inform Daltry’s and Samper’s counsel of such requests so
that counsel could object if desired. Finally, the letter rec-
ommended that Daltry and Samper seek the assistance of
independent counsel to determine whether consent should
be given, and the letter was separately sent to those clients’
independent counsel. Collectively, those aspects of the letter
satisfied the requirements of former DR 10-101(B).
As set out earlier, the trial panel determined that
the accuseds should have disclosed four additional points of
information, and the Bar—elaborating on the initial disclo-
sure allegations in its complaints—urges us to affirm that
determination on review. For the reasons explained below,
we do not agree that the accuseds were required under for-
mer DR 10-101(B)(1) to disclose the additional information
that the panel identified.
First, the complaints alleged that the accuseds
should have disclosed “the nature or extent of Garten’s
57
Of course, as Myers acknowledged before the trial panel, FLIR itself would
have been required to produce the documents to DOJ in any event, even if the
accuseds had not been acting as its counsel for that purpose at that time. (The
same is true for scheduling witness interviews.) It was the document production
itself—not necessarily the accuseds’ participation in the production—that most
clearly had potential adverse consequences to the Daltry and Samper. As noted,
the accuseds’ limited representation ensured efficiency in both the document pro-
duction and witness scheduling processes—a benefit that flowed to both FLIR
and the DOJ, and reduced FLIR’s (and likely the DOJ’s) costs.
Cite as 356 691 (2015) 763
demands for FLIR’s cooperation in the criminal case,”
apparently referring at least in part to Garten’s initial
request that the accuseds personally assist the DOJ. (As
noted, the trial panel determined that the accuseds should
have sent Garten’s February 14, 2003, letter to Daltry and
Samper.) As discussed earlier, however, Garten soon with-
drew that request after further consideration. Disclosure
of that request—withdrawn shortly after it was made—to
Daltry and Samper was not necessary to apprise them of
the nature of the conflicting client interests or the potential
adverse impact on them flowing from the accuseds’ limited
representation of FLIR in the DOJ investigation.58
Second, the complaints alleged—and the trial panel
determined—that the accuseds should have disclosed that
Ellis was representing Fitzhenry in his Bar matter, aris-
ing from alleged misrepresentations made in the 1999 man-
agement representation letter. At the panel hearing, Myers
briefly testified that his initial understanding in conver-
sations with Ellis had been that Fitzhenry was perhaps a
DOJ target to a lesser extent, and so he would have liked to
have known at the time of the limited representation that
Ellis also was representing Fitzhenry in the Bar matter.
As explained earlier, however, former DR 10-101(B)(1) does
not require a lawyer seeking client consent to disclose “all
facts known to [the lawyer] that could be helpful to the for-
mer client.” Cobb, 345 Or at 135. Instead, the rule requires
an explanation sufficient to describe the nature of the con-
flict between the clients—here, FLIR on the one hand, and
Daltry and Samper on the other—and the potential adverse
consequences that could flow from the new representation.
See id.; Brandt/Griffin, 331 Or at 137 (both so explaining).
As already described, Rosenbaum’s March 3, 2003, let-
ter disclosed sufficient facts to apprise their former clients
for purposes of obtaining consent; they were not required
to further disclose Ellis’s representation of Fitzhenry in
his Bar matter—a proceeding with professional licensing
58
The Bar also argues on review that Rosenbaum’s March 3, 2003, letter to
Daltry and Samper failed to fully disclose facts regarding FLIR’s purported infor-
mal immunity arrangement with the DOJ—that is, to cooperate in exchange for
avoiding prosecution. As noted earlier, however, see 356 Or at ____ n 45, ___ n 46,
the facts in the record do not support the Bar’s theory that any such arrangement
in fact had been made.
764 In re Ellis / Rosenbaum
implications for Fitzhenry alone, based on facts developed
during the SEC investigation.
Third, the complaints alleged that the accuseds
should have disclosed that they already had produced FLIR
documents to the FBI (and, inferentially by extension, to the
DOJ); in that regard, the trial panel determined that the
accuseds should have disclosed to Daltry and Samper that
the DOJ had requested, and the accuseds had produced,
their compensation information. As the facts summarized
earlier demonstrate, however, the accuseds already had told
Daltry’s and Samper’s independent counsel (Glade, Kaner,
and Myers)—before sending Rosenbaum’s March 3, 2003,
disclosure letter—that the DOJ was investigating Samper
and perhaps Daltry, that the DOJ had requested FLIR doc-
uments, and that the accuseds were producing FLIR docu-
ments on request on FLIR’s behalf. And, virtually all the
documents produced in the timeframe that the Bar has
identified were either part of the SEC proceeding or part of
the public record.59 Given those facts, we decline to conclude
that the accuseds were required to disclose in Rosenbaum’s
March 3, 2003, letter the fact of the ongoing document
production.
Fourth, the complaints alleged that Rosenbaum’s
March 3, 2003, letter should have disclosed that, with the
accuseds’ assistance, the SEC was investigating FLIR’s
accounting of transactions not previously alleged. As to
those allegations, the trial panel determined that the
accuseds should have disclosed that Rosenbaum had con-
tacted the SEC in October 2002 to ask about the Swedish
Drop Shipment, and the Bar seeks affirmance of that deter-
mination on review.60 We conclude that the accuseds were
59
As previously described, by March 3, 2003, the accuseds on FLIR’s behalf
had produced FLIR documents that previously had been provided to the SEC,
public FLIR securities filings, and pleadings from the earlier class action litiga-
tion. The accuseds had produced one nonpublic document containing previously
redacted material that had not been produced to the SEC, but that redacted mate-
rial was consistent with Wynne’s (and Samper’s) assertions made throughout the
SEC proceeding. As to the compensation information that the accuseds provided
to the DOJ, Daltry’s had been derived from public FLIR securities filings, and
Samper’s previously had been provided to the SEC by Glade and Kaner’s law
firm.
60
The trial panel also stated that Rosenbaum had provided the SEC with
documentation as to that transaction and also should have advised Daltry and
Cite as 356 691 (2015) 765
not obligated to disclose the fact of Rosenbaum’s SEC phone
call—to the extent that it arguably showed any “assistance”
with an ongoing investigation as alleged in the complaints—
to Daltry and Samper. As in Cobb, 345 Or at 135, and as
with Ellis’s representation of Fitzhenry in his Bar matter,
discussed earlier, that information might have assisted
Samper in developing his defense in the DOJ investiga-
tion. But its disclosure was not necessary under former DR
10-101(B)(1) to apprise him of the nature of his developing
divergent interest and conflict with FLIR in the context of
the limited representation, or to advise him of the potential
adverse impact on him if he consented to the accuseds’ rep-
resentation of FLIR in a role limited to producing requested
documentation and scheduling witness interviews.
In sum, we conclude that—assuming that a likely
conflict of interest existed between the accuseds’ current cli-
ent FLIR and their former clients Daltry and Samper under
former DR 5-105(C) at the time of their limited representa-
tion of FLIR in the DOJ investigation—Rosenbaum’s March
3, 2003, letter to Daltry and Samper set out an explanation
sufficient to apprise them of the nature of the conflict and
the potential adverse impact flowing to them from the lim-
ited representation, so as to obtain their consent to the rep-
resentation. The Bar has not proved by clear and convincing
evidence that the accuseds violated former DR 5-105(C) or
former DR 10-101(B).
B.  Misrepresentation by Omission
The Bar also alleged in the tenth and twelfth causes
that, in failing to make sufficient disclosures in Rosenbaum’s
March 3, 2003, letter, the accuseds engaged in misrepre-
sentation by omission, because they knowingly failed to
disclose facts that were material to former clients Daltry’s
and Samper’s decisions whether to consent to the limited
representation of FLIR during the DOJ investigation, in
violation of former DR 1-102(A)(3). See In re Gustafson, 327
Or 636, 647, 968 P2d 367 (1998) (rule requires that lawyer
knowingly engage in misrepresentation, including knowing
Samper of that fact, but the panel’s earlier factual findings stated that FLIR—
not Rosenbaum herself—had provided follow-up information to the SEC. The Bar
limits its argument on review to Rosenbaum’s phone call.
766 In re Ellis / Rosenbaum
failure to disclose material fact that lawyer had in mind).
Based on its decision that the accuseds insufficiently had
disclosed identified facts about former-client likely conflicts
so as to obtain consent under former DR 5-105(D) and former
DR 10-101(B), the trial panel similarly concluded that the
accuseds had violated former DR 1-102(A)(3). The accuseds
challenge that conclusion on review; the Bar responds that
the panel was correct.
In light of our conclusion that Rosenbaum’s March 3,
2003, disclosure letter complied with former DR 10-101(B),
we further conclude, without additional discussion, that the
Bar did not prove by clear and convincing evidence that the
accuseds engaged in misrepresentation by omission in viola-
tion of former DR 1-102(A)(3).
VII. CONCLUSION
On de novo review, we conclude that the Bar has
not proved the allegations at issue on review by clear and
convincing evidence, and we therefore dismiss those allega-
tions. We otherwise uphold the trial panel’s determinations
that the Bar also did not prove the remaining allegations
not at issue on review, and we therefore dismiss those alle-
gations as well.
The amended complaints are dismissed.