Under former California Rule 2-109, may a lawyer offer or accept a settlement provision that bars plaintiff's counsel from later representing anyone in litigation or arbitration against the settling defendant?

Currency note

This opinion was issued in 1988, under the former California Rules of Professional Conduct and before the State Bar of California's adoption of the November 1, 2018 revisions. The opinion interprets former Rule 2-109; the substance is now in current California Rule 5.6, parallel to ABA Model Rule 5.6. Subsequent rule amendments or later opinions may have changed the analysis. Treat this page as historical context, not current guidance. Verify against current rules before relying on any specific rule, deadline, or requirement mentioned here.

Disclaimer: This is an advisory ethics opinion. Advisory opinions are not binding; they interpret the State Bar of California's rules of professional conduct and are persuasive authority. This summary is for research purposes only and is not legal advice. Verify current rules before acting on any specific guidance.

About this page: The plain-English summary and Q&A below were written by Ezel based on the official opinion. The opinion text is reproduced at the bottom; the official source (linked) controls.

View original opinion

Plain-English summary

The committee took up a proposed settlement provision drafted by defense counsel that precluded plaintiff's counsel from representing any person or entity in any subsequent litigation or arbitration proceeding against the defendant or its affiliated entities. The plaintiff's lawyer signed the agreement. The underlying actions alleged unfair business practices against several financial institutions under California's Business and Professions Code.

The committee opined that former Rule 2-109(A) provided: "A member of the State Bar shall not be a party to or participate in an agreement, whether in connection with the settlement of a law suit or otherwise, if the agreement restricts the right of a member of the State Bar to practice law." (Rule 2-109(B)'s two exceptions did not apply.)

The committee opined that the provision placed in the hands of opposing parties the ability to control plaintiff's counsel's representation of subsequent clients and denied potential clients access to the attorney of their choice, particularly significant where the attorney's prior experience against the same defendant was what would make the attorney attractive to a new client. Because the provision limited the autonomy of attorneys and the ability of clients to freely choose, the committee opined that it "restricts the right of the attorney to practice law" within the meaning of Rule 2-109.

The committee acknowledged that plaintiff's counsel may face an uncomfortable choice when a defense offer in the client's best interest includes such a provision. The committee opined that uniform ethics opinions interpreting ABA Model Code DR 2-108(B), which is substantially similar to Rule 2-109(A), have held that defendant's counsel may not directly (D.C. Bar Op. 130 (1983)) or indirectly (Maryland State Bar Op. 82-53 (1982); Oregon State Bar Op. 258 (1974)) propose such a provision, nor may plaintiff's counsel accept it (Ohio State Bar Op. 81-10 (1981); Virginia State Bar Op. 649 (1985)). Both attorneys are in violation of Rule 2-109.

Common questions

Q: Can defense counsel even propose such a provision?

A: Per the opinion (citing D.C. Bar Op. 130, Maryland Op. 82-53, and Oregon Op. 258 as parallel authority), no. The committee opined defense counsel violates Rule 2-109 by proposing the restriction, whether directly or indirectly.

Q: Can plaintiff's counsel sign, on the theory that the settlement is best for this client?

A: Per the opinion, no. The committee opined that acceptance also violates Rule 2-109, and acknowledged the difficulty of the position but concluded that the rule's policy of preserving client choice and lawyer autonomy controls.

Q: Why does this implicate the right to practice law if the attorney can still take other cases?

A: Per the opinion, the provision places control over the lawyer's future representation in the hands of an opposing party, denying potential clients access to that lawyer. The committee opined this is particularly significant where the lawyer's prior experience against the same defendant is what makes the lawyer valuable to a future client.

Background and rules framework

The opinion interprets former California Rule of Professional Conduct 2-109, parallel to ABA Model Code DR 2-108(B) and now mirrored in current California Rule 5.6 and ABA Model Rule 5.6 (restrictions on a lawyer's right to practice).

Citations and references

Rules of Professional Conduct (former, in effect at time of opinion):

• Former California Rule 2-109(A) (and (B)'s exceptions, found inapplicable)
• ABA Model Code DR 2-108(B) (analog, referenced)

Other opinions cited:

• District of Columbia Bar Op. 130 (1983)
• Maryland State Bar Op. 82-53 (1982)
• Oregon State Bar Op. 258 (1974)
• Ohio State Bar Op. 81-10 (1981)
• Virginia State Bar Op. 649 (1985)

See also

No sibling opinions yet indexed.

Source

• Landing page: https://www.calbar.ca.gov/legal-professionals/ethics-compliance-practice-resources/ethics/ethics-opinions
• Source HTML: https://www.calbar.org/ethics/Opinions/1988-104.htm

Original opinion text

Reproduced from the official source for research purposes. The linked source is authoritative.

Ethics Opinions - FORMAL OPINION NO. 1988-104

Editor's Note:

State Bar Ethics Opinions cite the applicable California Rules of Professional Conduct in effect at the time of the writing of the opinion. Please refer to the California Rules of Professional Conduct Cross Reference Chart for a table indicating the corresponding current operative rule. There, you can also link to the text of the current rule.

THE STATE BAR OF CALIFORNIA

STANDING COMMITTEE ON

PROFESSIONAL RESPONSIBILITY AND CONDUCT
FORMAL OPINION NO. 1988-104

ISSUE:

May an attorney offer or accept a provision as a condition of settlement which would preclude plaintiff's attorney from subsequently suing the settling defendant?

DIGEST:

An attorney may neither offer nor accept such a provision.

AUTHORITIES INTERPRETED:

Rule 2-109 of the Rules of Professional Conduct of the State Bar of California.

DISCUSSION

Actions were brought against several financial institutions alleging unfair business practices in violation of specific provisions of the Business and Professions Code. A proposed settlement agreement, prepared by defendant's attorney, precluded plaintiff's attorney from representing "any person or entity in any litigation or arbitration proceeding against [defendant] or its affiliated entities; . . ." Plaintiff's attorney signed the agreement. An opinion on the propriety of this provision has been requested from the Committee. California Rule of Professional Conduct 2-109(A) provides:

A member of the State Bar shall not be a party to or participate in an agreement, whether in connection with the settlement of a law suit or otherwise, if the agreement restricts the right of a member of the State Bar to practice law."1

It is the opinion of the Committee that the provision being considered places in the hands of opposing party the ability to control the attorney's representation of subsequent clients. Thus, it denies a potential client access to an attorney of their choice. This is especially important where the attorney has previous experience in pursuing a matter against the particular defendant. Indeed, it is this previous experience which may make the attorney more attractive to the potential client.

Because the provision limits the autonomy of attorneys and the ability of clients to freely choose an attorney, it is the opinion of the Committee that the inclusion of the provision in the settlement agreement restricts the right of the attorney to practice law.

The Committee acknowledges that plaintiff's attorney may find him or herself in an uncomfortable position if faced with a settlement offer that is in the best interests of the client but which includes the provision being considered. However, ethics opinions interpreting American Bar Association Model Code of Professional Conduct DR 2-108(B),2 which is substantially similar to California rule 2-109(A), have uniformly held that defendant's attorney may not directly (District of Columbia Bar Association Opinion 130 (1983)) or indirectly (Maryland State Bar Opinion 82-53 (1982); Oregon State Bar Opinion 258 (1974)) propose such a provision, nor may plaintiff's attorney accept it (State Bar of Ohio Opinion 81-10 (1981); Virginia State Bar Opinion 649 (1985)). Thus, both attorneys will be in violation of rule 2-109.

The cited ethics opinions support the opinion of this Committee that rule 2-109 clearly prohibits both plaintiff's and defendant's attorney from offering or accepting a provision as a condition of settlement which would preclude plaintiff's attorney from subsequently suing the settling defendant because such a provision restricts plaintiff attorney's right to practice law.

This opinion is issued by the Standing Committee on Professional Responsibility and Conduct of the State Bar of California. It is advisory only. It is not binding upon the courts, the State Bar of California, its Board of Governors, any persons or tribunals charged with regulatory responsibility or any member of the State Bar.

1 Rule 2-109(B) sets forth two exceptions to this rule. Neither is relevant to the inquiry.

2 DR 2-108(B) provides that "[i]n connection with the settlement of a controversy or suit, a lawyer shall not enter into an agreement that restricts his right to practice law."