Palmer v. Pioneer Inn Assocs., Ltd.

• Citation: 59 P.3d 1237,118 Nev. 943
• Decision Date: 27 December 2002
• Docket Number: No. 38213.,38213.
• Parties: Dena PALMER, Appellant, v. PIONEER INN ASSOCIATES, LTD., a Limited Partnership, Respondent.
• Court: Supreme Court of Nevada

59 P.3d 1237

118 Nev. 943

Dena PALMER, Appellant, v. PIONEER INN ASSOCIATES, LTD., a Limited Partnership, Respondent.

No. 38213.

Supreme Court of Nevada.

December 27, 2002.

Hardy & Associates and Ian E. Silverberg, Reno, for Appellant.

McDonald Carano Wilson LLP and Miranda Du and Pat Lundvall, Reno, for Respondent.

Bradley Drendel & Jeanney, Reno, for Amicus Curiae Nevada Trial Lawyers Association.

Rob W. Bare, Bar Counsel, and Felicia Galati, Assistant Bar Counsel, Las Vegas, for Amicus Curiae State Bar of Nevada.

BEFORE THE COURT EN BANC.

OPINION

PER CURIAM:

In this matter, we are asked by the United States Court of Appeals for the Ninth Circuit to answer two certified questions:

1. In applying Supreme Court Rule 182 to an employee of a represented corporation, does Nevada apply the portion of the commentary to Model Rule 4.2 barring ex parte contact with an employee "whose statement may constitute an admission on the part of the organization"?

2. If so, does Nevada interpret that portion of the commentary by analogy to Fed.R.Evid. 801(d)(2)(D), by application of agency principles, or by a different analysis?

These questions concern the interpretation of SCR 182, which is based on ABA Model Rule 4.2, as applied to employees of organizational clients. The rule is commonly referred to as the "no-contact" rule.

We note that while the matter has been pending, the comment language at issue was deleted in the 2002 amendments to the ABA Model Rules, and new language was adopted. As we never formally adopted the comments to the Model Rules, we may interpret SCR 182 according to the new version of the comment, the old version of the comment, or some other basis.

We also note that a literal reading of the Ninth Circuit's questions could yield a result that offers no guidance: if we decide that the language at issue does not apply, then the answer to the first question is "no" and the second question need not be addressed, but the Ninth Circuit would still not know what test Nevada uses in applying SCR 182 to an employee of a represented organization. We therefore rephrase the first question as follows, and delete the second question:

What test does Nevada use in applying Supreme Court Rule 182 to an employee of a represented organization?

The federal district court determined that if an employee's statement qualifies as a party-opponent admission under FRE 801(d)(2)(D), then contact with the employee falls within SCR 182's prohibition.¹ We conclude that the better test is the "managing-speaking agent" test. We adopt this test, as set forth in this opinion, in determining whether contact with an employee of a represented organization is barred by SCR 182.

FACTS

Dena Palmer applied for work as a waitress at the Pioneer Inn Hotel and Casino in Reno, Nevada. She allegedly also discussed possible positions as a deli food server and a restaurant supervisor with Greg Zamora, Food and Beverage Director. According to Palmer, Zamora told her that she would be hired as a restaurant supervisor, but when she arrived for work, Zamora told her she had been rejected by one of Pioneer's general managers because she was pregnant. Palmer allegedly told him that she believed this was unlawful discrimination, but Zamora confirmed that she would not be hired. Pioneer asserted that Palmer was never hired because she did not complete Pioneer's standard hiring process. This process begins with an initial screening by Pioneer's human resources department, followed by an interview with the department for which the applicant wishes to work. At that interview, an offer of employment may be extended, conditional upon completion of the hiring process. Upon acceptance of a conditional offer, the applicant is required to attend an orientation, complete new hire forms, and obtain a police work card. Pioneer argued that since Palmer completed only the first two steps, initial screening and an interview with the appropriate department, she was never actually hired. Palmer essentially maintained that she attempted to complete the hiring process, but was prevented from doing so when Zamora revoked the offer of employment and told her she would not be hired because of her pregnancy.

Pioneer also asserted that only a deli food server position was available at the time Palmer applied, and that Palmer rejected this position because the required hours conflicted with her other job as a waitress at the Olive Garden. According to Pioneer, as no positions for a waitress or restaurant supervisor were available at the time, Palmer could not have been offered these positions. In contrast, Palmer claimed that Zamora gave her the restaurant menus and a pamphlet on supervisor responsibilities to study, and told her the dress code requirements for the position. Palmer alleged that in reliance on the offer of this better position, she quit her job at the Olive Garden and purchased clothing suitable for a supervisor. Additionally, Palmer argued that she would never have quit her job at the Olive Garden if she did not believe that she had been hired.

When Palmer was not hired, she retained counsel almost immediately. Palmer's attorney informed Pioneer by letter dated February 27, 1997, that he intended to file an action on her behalf. In early March 1997, Palmer lodged a complaint with the Equal Employment Opportunity Commission.² Pioneer retained counsel to represent it in the matter, and counsel sent a letter to Palmer's attorney informing him of the representation.

In April 1997, George Kapetanakis, then an executive sous chef at Pioneer,³ contacted Palmer's attorney. Following their discussion, Kapetanakis signed an affidavit, prepared by Palmer's attorney, which stated: "during the month of January, 1997, I witnesse[d] Mr. Greg Zamora interviewing ... [Palmer] .... I inquired of Mr. Zamora whether he intended to hire [her] at which time Mr. Zamora told me that he had already hired her." Kapetanakis's job was a supervisory position that involved running Pioneer's main kitchen.

Palmer received a right-to-sue letter from the EEOC. On July 9, 1997, Palmer filed an action in federal court alleging pregnancy and gender discrimination under Title VII,⁴ and pendent state law claims.

Pioneer moved to disqualify Palmer's counsel under SCR 182 based on his ex parte contact with Kapetanakis.⁵ The federal magistrate judge found that Kapetanakis was a supervisor who had responsibility for interviewing and hiring cooks, dishwashers, and sous chefs, although not waitresses, servers, or restaurant supervisors. The magistrate concluded that, even though Kapetanakis was not involved in hiring waitresses, food servers, or restaurant supervisors (any of the positions Palmer claims to have discussed with Zamora), "[b]ecause his job responsibilities included hiring employees, he was in a position to make statements concerning the hiring policies of Pioneer." The magistrate then held that counsel's contact with Kapetanakis constituted ex parte contact with a represented party under SCR 182, and sanctioned counsel by excluding the affidavit obtained by the contact, precluding Kapetanakis from testifying about the information contained in the affidavit, and awarding fees and costs of $2,800 to Pioneer. After Palmer filed an objection, the federal district court affirmed the magistrate's order in its entirety.

Before trial, the district court dismissed two of Palmer's claims on summary judgment. At trial, the jury found for Pioneer. Palmer appealed the summary judgment, certain rulings at trial, and the order imposing sanctions for her counsel's ex parte contact. The questions certified by the Ninth Circuit concern only the sanctions order.

DISCUSSION

SCR 182, Model Rule 4.2 and Comments

SCR 182 provides:

In representing a client, a lawyer shall not communicate about the subject of the representation with a party the lawyer knows to be represented by another lawyer in the matter, unless the lawyer has the consent of the other lawyer or is authorized by law to do so.

This rule was adopted verbatim from the original version of ABA Model Rule 4.2,⁶ which in turn was copied almost verbatim from Model Code of Professional Responsibility DR 7-104(A)(1). Before that, the same general concept was contained in Canon 9 of the ABA Canons of Professional Ethics.⁷

The primary purpose of the rule is to protect the attorney-client relationship from intrusion by opposing counsel.⁸ It protects parties from unprincipled attorneys and safeguards the attorney-client privilege. It also promotes counsel's effective representation of a client by routing communication with the other side through counsel, who can present the information in a way most favorable to the client.⁹ Sanctions for violating the rule have included disqualification of counsel, monetary sanctions, exclusion of information obtained by ex parte contact, prohibition on the use of such information at trial, and production to the organization's counsel of information obtained by ex parte contact, including all or part of the work product connected with the contact.¹⁰

The rule's protections undisputedly extend to organizational parties, who must act through their directors and employees.¹¹ Accordingly, at least some of the organization's agents must be viewed as the equivalent of a "party" for the rule to have any effect.¹² A conflict between policies arises, however. On one hand, the rule's protective purposes are best served by defining this pool of agents broadly. On the other hand, defining the pool more narrowly fosters the use of informal discovery methods, which further the prompt and cost-effective resolution of disputes. Moreover, a narrower definition affords a reasonable opportunity for pre-litigation investigation under Rule 11.¹³ The question then becomes how to apply the rule in a way that best balances the competing policies.

The ABA has attempted to provide some guidance in this area in its...