Joining the issues on the high road


By:


Bruce Hoffman and Heather M. Johnson, Bureau of Competition

The great majority of attorneys appearing before the Commission share a sense of practicing at the height of our profession.  They engage with Commission staff on pressing issues of fact, antitrust law and economic theory in matters of great importance to consumers and our economy.  For a few, however, there may be perceived opportunities to seek an advantage in the debate through misrepresentation of key facts.  For those few, we want to remind practitioners that attorneys appearing in an investigation or administrative proceeding owe a duty of candor and professionalism to the Commission and its staff.  The Commission’s Rules require no less, and provide for public reprimands, sanctions, and even disbarment from Commission practice for attorneys who fail to uphold the high standards our profession requires.

Commission Rule 4.1(e) outlines certain scenarios in which an attorney can be reprimanded, suspended, or disbarred from practicing before the Commission.  Under Commission Rule 4.1(e)(1)(i)(C), “obstructionist, contemptuous, or unprofessional conduct during the course of any Commission proceeding or investigation” will not be tolerated.  The Commission added this language to its Rules in 2012, consistent with similar provisions adopted by other federal agencies, to clarify that obstreperous behavior could warrant and result in serious consequences.

Likewise, under Commission Rule 4.1(e)(1)(i)(D), the Commission may reprimand, suspend, or disbar from practice before the Commission any attorney who has “knowingly or recklessly given false or misleading information, or has knowingly or recklessly participated in the giving of false information to the Commission or any officer or employee of the Commission.”  The Rule further clarifies that “knowingly giving false or misleading information includes knowingly omitting material facts necessary to make any oral or written statements not misleading in light of the circumstances under which they were made.”  Rule 4.1(e) applies to all matters pending before the Commission, at all stages of a matter, whether in Part 2 or Part 3.

While this behavior is the exception rather than the rule, we have seen circumstances where internal documents expressly contradict representations made by counsel and clients during investigations.  We understand that this could happen for innocent reasons – for example, counsel (or even senior business people at clients) may simply be unaware of particular documents – but there have been cases where the innocent explanation seemed implausible.  In such cases, whether involving deliberate misconduct or recklessness, we will consider taking action.

It should not be necessary to point out that misstatements are rarely, if ever, effective.  We are able to verify most key facts from the many different sources of information available to us.  As a result, misrepresentations rarely persuade.  Further, they can undermine counsel’s or a party’s arguments in not only the pending matter, but in subsequent appearances at the Commission.  Misstatements also can delay resolution of a matter as they may trigger second-guessing of other representations.  They may place additional burdens on third parties where the FTC either needs to go back and reconfirm information, or seek new information as a result of a misrepresentation.

The legal profession thrives on integrity.  The ABA Model Rules recognize that while there is no duty to inform an opposing party of relevant facts, “a lawyer is required to be truthful when dealing with others on a client’s behalf … Misrepresentations can also occur by partially true but misleading statements or omissions that are the equivalent of affirmative false statements.”

We welcome zealous representation of clients. We expect that counsel practicing before the Commission will “play hard” on behalf of their clients.  But Commission rules require fair play, so that Commission decisions are made on the basis of sound evidence.  It is better to acknowledge and address difficult facts, or to concede that your information may not be perfect, than to conceal or misrepresent the facts or overstate your knowledge.