Pang v. Int'l Document Servs. - 2015 UT 63, 356 P.3d 1190 (Sup.Ct.)

Rule:

Utah R. Prof. Conduct 1.13(b) does not constitute a clear and substantial public policy that prevents the termination of an at-will employee. And even if it did, other rules of professional conduct evince strong policy choices that favor allowing clients to terminate the attorney-client relationship at any time, including firing an in-house lawyer with whom an organizational client disagrees.

Facts:

David K. Pang, an attorney, filed a complaint against his employer alleging that he was terminated for refusing to ignore the company's violation of several states' usury laws. He asserted that the company had effectively asked him to violate the Utah Rules of Professional Conduct in order to keep his job. The district court dismissed his complaint, concluding that Mr. Pang was an at-will employee and that his firing did not violate a clear and substantial public policy of the State of Utah. Mr. Pang also argued that the district court improperly dismissed his claims without holding an oral hearing.

Issue:

Did rule 1.13(b) of the Utah Rules of Professional Conduct reflect a clear and substantial public policy of the kind sufficient to prevent companies from terminating in-house legal counsel for reporting illegal activity to management?

Answer:

No

Conclusion:

The court affirmed the district court's decision. Rule 1.13(b) does not constitute a clear and substantial public policy that prevents the termination of an at-will employee. And even if it did, other rules of professional conduct evince strong policy choices that favor allowing clients to terminate the attorney-client relationship at any time, including firing an in-house lawyer with whom an organizational client disagrees. As regards Mr. Pang’s argument that the district court improperly dismissed his claims without holding an oral hearing, the court found that the Utah Rules of Civil Procedure require district courts to grant a litigant's request for a hearing on a dispositive motion unless the motion is frivolous or the issue has been authoritatively decided. The court agreed with Mr. Pang that his opposition to the motion was not frivolous and the issues had not been authoritatively decided, so the district court erred when it denied his request for a hearing. But because Mr. Pang has not identified any substantive argument he would have raised if his request had been granted, the court concluded that the error was harmless. The court noted, however, that because a rule 12(b)(6) dismissal is generally not a judgment on the merits and the district court did not dismiss the complaint with prejudice, nothing precludes Mr. Pang from filing a new complaint.