In the Court of Public Opinion,
Settlement Negotiations Are Always Admissible
There is no FRE 408 (or its local equivalent) in the court of public opinion.
Any settlement discussions an attorney has with opposing counsel, or directly with an unrepresented party, are admissible and can be used against the attorney’s client—and the attorney—in the court of public opinion.
This is not an academic concern. Just ask Pepper Hamilton and one of its partners.
Recently, the now-former chair of the Pennsylvania GOP, Valentino DiGiorgio III, resigned from his post hours after the Philadelphia Inquirer reported that he had exchanged what the newspaper characterized as “sexually charged messages” with, and sent an “explicit” photo to, Irina Goldstein, a candidate for Philadelphia City Council.
But this column isn’t about those messages or that photo. This column is about DiGiorgio’s efforts to deal with those messages and that photo, as described in the following three paragraphs from that Inquirer report:
Goldstein, 35, also said Michael Schwartz, a former federal prosecutor now representing DiGiorgio as a private attorney, called her last week and proposed that she sign a nondisclosure agreement that would bar her from disparaging DiGiorgio, 51, who is married with children. Schwartz, she said, offered to have DiGiorgio also sign the agreement and told her that keeping their interactions confidential was in her best interest.
“He said my reputation would be ruined,” Goldstein told The Inquirer. “Like [DiGiorgio] was going to do me a favor by not talking about me.”
Schwartz did not respond to multiple requests for comment. He and the firm where he works, Pepper Hamilton, have represented The Inquirer in legal matters.
So we have a person, Goldstein, who presumably has an unfavorable view of another person, DiGiorgio, recounting to a major daily newspaper her recollection of what that other person’s attorney said to her in his efforts to resolve an issue between the two. And, surprise!, it doesn’t make the other person or his attorney look good.
Without seeing the full text of Goldstein’s conversation(s) with DiGiorgio’s attorney, we have no way of knowing whether the attorney actually said what Goldstein said he did. And even if he did, it isn’t clear that he said anything deserving of criticism.
But that is not the point here.
What IS the point is that no matter what kind of FRE 408-style disclaimer the attorney might have used when communicating with Goldstein, at least some portion of the settlement negotiations were eventually made public.
And, without the attorney or his law firm willing to speak to the Inquirer to rebut the substance of what Goldstein claimed he said, or make clear that he was not threatening her, the report of what he said, without any additional context, is not particularly flattering to the attorney or his client.
“So what?” you say. “The attorney was advocating for his client and offered a way to resolve this dispute that might have been in the interests of both parties. And the other party leaked this conversation to the media. What’s the big deal?”
The big deal is that Pepper Hamilton’s—and every other law firm’s—current and future clients are human. So too, obviously, are law firms’ current and future associates, partners, staff members and referral sources.
Members of these groups, who just so happen to be vital to the success of all law firms, could quickly develop an irreversible negative impression of a law firm based on public reports of one of its attorney’s efforts to resolve a legal dispute on behalf of a client.
If you think nondisclosure agreements like the one reportedly discussed in the DiGiorgio/Goldstein dispute are uncontroversial and without their detractors, you haven’t been paying close enough attention to what’s happening in the legal industry and in society overall.
Negative opinions toward a law firm and its attorneys sometimes speak softly. But they often carry a big stick.
All it takes is one general counsel deciding to take her business elsewhere, or for one rainmaker eliminating a law firm from her list of potential lateral landing spots, for reputational damage to translate into lost revenue for that law firm.
Media-savvy litigants know that disclosing settlement negotiations in the court of public opinion can be beneficial to them because that disclosure could help them gain leverage in those negotiations. Because of this, attorneys need to keep in mind that in certain disputes that are high-profile or have the potential to be high-profile, settlement negotiations may be leaked to the media.
Attorneys who themselves disclose the substance of settlement negotiations could run into ethical issues under Rule of Professional Conduct 3.6 (trial publicity) because the substance of such negotiations are generally inadmissible in court.
Attorneys should be thinking about whether they are comfortable with whatever they plan on saying in writing or during oral conversations about settlement negotiations appearing word-for-word in their local daily newspaper or in another influential media outlet.
And, if they are approached by media outlets that are working on reports about such negotiations, they should consider substantively responding to those inquiries (directly or through their firms) so as to make sure those negotiations are not taken out of context.
The Inquirer’s report of settlement negotiations in the DiGiorgio/Goldstein dispute may be a tempest in a teapot. Given Pepper Hamilton’s sterling reputation and position as one of the leading law firms in the United States, it is possible that nothing negative for the firm comes about as a result of the Inquirer’s report.
But something could.
That is reason enough for all attorneys to keep in mind that their settlement negotiations with opposing counsel and adversaries may one day appear in an influential media outlet—and to proceed accordingly in future negotiations because of that possibility.
Wayne Pollock is the founder and managing attorney of Copo Strategies in Philadelphia, a national legal services and communications firm. Attorneys and law firms enlist Copo Strategies to engage the media and the public regarding their clients’ cases (to help resolve those cases favorably), and to engage the media, referral sources, and prospective clients regarding their firms (to help bring new client matters in the door). Contact him at firstname.lastname@example.org or 215.454.2180.
Reprinted with permission from the July 30, 2019, edition of The Legal Intelligencer © 2019 ALM Media Properties, LLC. All rights reserved. Further duplication without permission is prohibited, contact 877-257-3382 or email@example.com.