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  • Robert Weed

Confidentiality or Obstruction of Justice: Where’s the Line?

I hate it when people do illegal stuff to my customers.

For a consumer bankruptcy lawyer, I’m litigious.  I’m quick to sue.

Virginia Bankruptcy Lawyer Robert Weed explains confidentiality

I’m a bankruptcy lawyer. Compared to most bankruptcy lawyers, I’m quick to sue on consumer law violations.

People in financial trouble can be magnets for illegal stuff.  Fair Debt Collection Practices Act violations.  Fair Credit Reporting Act violations.  Illegal internet payday loans.  And debt settlement, avoid bankruptcy scams.

Also violations of the bankruptcy automatic stay, and bankruptcy discharge.

So, for a bankruptcy lawyer, I’m quick to sue on those consumer violations.  I’m also quick to settle.  (My clients are not out to make a buck; just be treated right.  If you ARE out to get revenge, I’ll send you to lawyers whose primary legal field is consumer law.  You can find some, here.)

As a general rule, I try to get your problem fixed.  Plus get you $1000 for your trouble. And get my fees paid by the outfit who violated your rights.  That’s all.

I don’t try to run up the score on (mostly) honest outfits who just made a mistake.

Agreeing to Confidentiality

When we settle cases, the tall building lawyers tell me their clients want “confidentiality.”  (I call the lawyers for the outfits we sue, “tall building lawyers.”)

I used to agree to “confidentiality” pretty regularly.  I still do.  If “confidentiality” means we won’t talk about the dollar amount of the settlement.  (Mine are rarely very big anyway.  Like I said, if you really want revenge for what was done to you, there are lawyers better than me for that.)

Here’s an article I found on the internet with some sample “confidentiality” agreements.   They keep the settlement itself and the dollar amount confidential.

More and more, when the tall building lawyers want confidentiality, they add “non-disparagement.”  Here’s an example. It’s drafted by lawyers from two of the top “tall building” law firms in Washington DC.  Besides keeping the terms of the settlement a secret, you promise to never say anything bad about the outfit we sued.

I said a minute ago, I’m not out to run up the score on mostly honest outfits who just make a mistake.  What if it turns out, this is not a mistake?  Suppose they are doing it on purpose!

Then that promise to never say anything bad means you won’t testify. If it turns out there’s a government investigation, you won’t cooperate.  I wonder if that’s not a conspiracy to obstruct justice!

Obstruction of Justice

Take a look, with me, at the the Obstruction of Justice law.  It’s at 18 USC 1512.

Section (b)(1) threatens 20 years in prison to anyone who:

(b) …Corruptly persuade(s) another person..with the intent to

(1) influence, delay, or prevent the testimony of any person in an official proceeding;

Further down, (f) makes it clear that there does not need to be an “official proceeding” going on when the corrupt persuasion is done. And (g) adds that the “official proceeding” doesn’t need to be a criminal prosecution. It can just be an investigation by a “government agency.”

What does that mean?  Suppose we sue Dirty Debt Buyer for making harassing phone calls to you.  Dirty Debt Buyers is collecting on a debt that was discharged in bankruptcy.  And later, the Consumer Finance Protection Bureau wants to fine Dirty Debt Buyer for violating the FDCPA.  Or the Office of the US Trustee investigates them for repeatedly violating the bankruptcy discharge.

If we’ve agreed to non-disparagement, then you’ve promised you won’t be a witness.  If an investigator comes around, you’ll refuse to make a statement.  By paying you to make that promise, has Dirty Debt Buyer obstructed justice?

And if Dirty Debt Buyer is looking at 20 years for persuading you not to testify, what have we done, by agreeing?

Wew!  I don’t want to answer that question.

Samples of confidentiality agreements I won’t sign.

I’ve written this post to help me.  And to help and you. And to help the tall building lawyers, all stay on the right side of the obstruction of justice law.

When I get settlement agreements that get into that gray area, I’m posting them here.

To start, here’s one I got this week, from NationStar. Galactic Mortgage.   This one has a kind non-disparagement in it, but it doesn’t call it that.  It just calls it confidentiality.  Here you agree you won’t tell anybody about what NationStar did that violated your rights.  But you could still say that you don’t like the color of their stationary.  Or something.

 PS  Some samples of government agency investigations

Here’s a link to some of the individual complaints the CFPB has looked into.  And this link is to enforcement actions they’ve taken on repeat violators.  If we agree to a non-disparagement clause, we agree you will clam up if you are asked if anything like that has happened to you.

And the Federal Trade Commission is prosecuting a Florida weight loss outfit, for trying to enforce a non-disparagement agreement with their customers.  The FTC says enforcing a non-disparagement clause is an unfair trade practice.  

Legal Ethics Violations.

Here’s  a legal ethics opinion from the Chicago Bar Association.  It says that it’s a legal ethics violation for a lawyer (that’s me) to agree I’ll withhold information from future clients.  And it’s a legal ethics violation for their lawyer (the “tall building lawyer”) to ask you to withhold information from anybody who might need it.  (That’s the obstruction of justice I talked about.  Calling it a legal ethic violation is a little nicer than calling it obstruction of justice.)  Finally, it’s a legal ethics violation for me to withhold  publicly available information (the complaint we filed with the court) from the public.

Here’s a similar opinion from the DC Bar.

So, we can agree NOT to say how much money we settled for.  But promising to withhold any other information, could potentially get both lawyers in trouble.

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