The Dark Knight: Legal Ethics

So The Dark Knight Rises comes out next week. In preparation, we’re taking a look at one of the issues from The Dark Knight. Specifically… isn’t Coleman Reese violating the rules of professional ethics? (Spoilers below!)

I. The Setup

Coleman Reese is an attorney hired by Wayne Enterprises to assist with the pending merger with LSI Holdings. While “running the numbers,” Reese discovers some irregularities and goes on a fishing expedition. He finds blueprints of the Batmobile (aka the Tumbler) and—correctly!—concludes that Bruce Wayne is Batman. One of the funnier moments in the movie is here, where Reese attempts to blackmail Wayne Enterprises by confronting Lucius Fox about this discovery. Suffice it to say that he hadn’t crunched all of the relevant numbers.

Later, Reese goes public, or at least tries to. This is after the Joker threatens to kill people if Batman doesn’t come forward. Things don’t go as planned, and the Joker changes his mind, but that’s the basic idea.

II. The Blackmail

Clearly, blackmail is a bad idea. Blackmailing Batman is a worse one. But apart from the blackmail, Reese was right to go to Fox about his discoveries. ABA Model Rule 1.13, Organization as Client, reads, in part, as follows:

(b) If a lawyer for an organization knows that an officer, employee or other person associated with the organization is engaged in action, intends to act or refuses to act in a matter related to the representation that is a violation of a legal obligation to the organization, or a violation of law that reasonably might be imputed to the organization, and that is likely to result in substantial injury to the organization, then the lawyer shall proceed as is reasonably necessary in the best interest of the organization. Unless the lawyer reasonably believes that it is not necessary in the best interest of the organization to do so, the lawyer shall refer the matter to higher authority in the organization, including, if warranted by the circumstances to the highest authority that can act on behalf of the organization as determined by applicable law.

Bruce Wayne is certainly a “person associated with the organization,” and he’s definitely acting in a manner related to the representation—spending Wayne Enterprises’ money, if nothing else—which is probably a violation of a legal obligation to the organization, i.e., not wasting shareholder dollars or using corporate assets for personal projects. That’s called “embezzlement”. It’s also “likely to result in substantial injury to the organization,” as that cellphone surveillance project wasn’t exactly free. Not to mention any negative press or damage to the corporation should Batman’s identity be discovered. And the right thing to do if a lawyer for a corporation discovers something like that is to go to the CEO. Which Reese did. And if he’d simply said “Mr. Fox, we’ve got a problem here,” he’d have been entirely in the clear. Unfortunately, he got greedy, with hilarious results.

III. The Media Interview

But when the Joker threatens mayhem should Batman not step forward, Reese decides to go to the media. This time, he’s actually in the clear, completely. ABA Model Rule 1.6, Confidentiality of Information, reads, in part:

(b) A lawyer may reveal information relating to the representation of a client to the extent the lawyer reasonably believes necessary:(1) to prevent reasonably certain death or substantial bodily harm;

It doesn’t say that the client will be causing the death or injury, just that revealing the information is reasonably necessary to prevent such. So if a lawyer has information about a client, and the lawyer reasonably believes that revealing it will save someone’s life, they can reveal it (NB they don’t have to, but they may). That’s what Reese decided to do. The Joker threatened to kill people unless he got this information, and Reese reasonably concluded that revealing that information might save people.

Of course, the Joker changed his mind, at which point revealing that information would not be reasonably calculated to save anyone’s life. So if he had revealed the information after the Joker changed the terms, he’d have violated the rules of ethics.

III. Conclusion

So while Reese trying to blackmail Wayne was a problem, going to Fox wasn’t. And going public when the Joker threatened Gotham City was actually fine. We’ll have another post about the potential embezzlement issue next week as we prepare for the release of The Dark Knight Rises!

17 Responses to The Dark Knight: Legal Ethics

  1. I disagree with Part II. I don’t think acceding to the demands of a domestic terrorist is what the creators of the Model Rule had in mind.

    Revealing Batman’s identity wouldn’t prevent any harm, it would have just transferred it from one victim to another. The Joker is saying: “Tell me this person’s identity so that I can torture and kill him (and everyone he loves), or else I’ll torture and kill someone else.” That’s a far cry from the classic case of telling the police that a victim is in imminent danger, even if the person placing the victim in imminent danger is your client.

    There are good reasons to think that giving in to a demand like the Joker’s is moral, as distinct from ethical, (and better reasons to think that it’s not) but either way it’s not clearly within the Model Rule you’re citing. At best it’s a gray area, and I suppose he could argue that he’s acting under duress and thus less culpable. Still, I would still expect him to be punished had he gone through with revealing the information.

    • Revealing Batman’s identity wouldn’t prevent any harm

      The threat was to kill someone every hour until Batman’s identity was revealed. The ‘transfer of harm’ is from a group of unknown, ordinary victims to Batman, who is presumably better equipped to defend himself and would know he was being targeted and so could take appropriate measures, seek police protection, etc. So there’s a pretty strong “lesser of two evils” argument to be made, in my opinion.

      But in any case, the rule and the official comments speak only in terms of preventing reasonably certain death or substantial bodily harm. There’s no mention of a balancing test (e.g. “preventing reasonably certain death or substantial bodily harm unless the disclosure would lead to a different kind of harm”). While your argument could (and probably would) be made, I think there are strong counter arguments, both in the facts of the case and in the text of the rule.

    • Yeah, I think we’re entirely ready to concede that this is pushing the boundaries of the rule and not really what it was intended to cover. But I think we’re also confident that it does fit within the plain text of the rule. According to the text, a breach of confidentiality that got the client killed could be justified if the breach was motivated by the reasonable belief that it would avoid someone’s death or substantial injury. That may be a weakness in the rule, but it is the way the rule is written.

  2. Technically, it almost sounds like the lack of a balancing test and the literal denotation of the words would permit disclosure of info one KNEW would get his client killed if it would prevent “significant harm” to somebody else. One might even be able to disclose information that one knew would likely get a LOT of people – all your clients – killed, to prevent the dismemberment of one person.

    At least, that’s what I’m getting as the unintended but denotatively valid reading, here.

    • Ryan Davidson

      That may be true. Generally speaking, the rules are written to give attorneys a fair amount of discretion. There aren’t all that many absolutely bright line rules. There’s a recognition that there may be more than one option which is ethical, and that reasonable minds can differ. So if there’s a situation where a balancing test might be employed, in most cases the rules take the position that either outcome is ethical.

      That’s my impression anyway.

      So, in this case, one can decide whether it’s more ethical to speak out or to say silent. There are arguments on both sides. So the rules say that as long as there’s a reasonable belief that the disclosure will prevent some death or some bodily injury, that’s good enough.

      Note that it wouldn’t be good enough if the Joker had just threatened to steal something. That wouldn’t be a danger to someone’s life. Nor would it probably be okay if the Joker threatened to kill someone next month. Not immediate enough. But if there’s a clear and present danger to life and/or limb, the rules aren’t going to force the attorney’s hand.

  3. If the Joker had just told the lawyer about his threat to kill one person an hour, after the lawyer revealed the information to him is the lawyer obligated to report the threat (and is he required to warn Batman)?

    • Ryan Davidson

      First, the rule is permissive, not prescriptive. “A lawyer may reveal…” not “A lawyer shall reveal…” Under our analysis, the rule would have permitted Reese to either talk or keep his mouth shut. There isn’t a general duty to disclose that sort of information, just like there’s no general duty to rescue. The Code of professional conduct thus doesn’t create an exception to an existing duty.

      Second, it really doesn’t matter to whom the threat is made as long as (1) the lawyer knows about it, and (2) it’s credible. If there’s an intermediary, e.g., the Joker tells Two-Face and Two-Face tells Reese, then it would need to be reasonable for Reese to believe Two-Face before he would be permitted to breach confidentiality.

      The choice of Two-Face in that example is deliberate, as he’s not exactly known for being credible all the time. And here’s the thing: it doesn’t matter whether or not the threat is true just whether it would be reasonable to believe that it is. If the threat is plausible, then an attorney can breach confidentiality whether or not it’s accurate. If it isn’t plausible, then he’s bound to confidentiality even if the threat turns out to be true.

      • The ethics rule may say you are welcome to go ahead and break confidentiality, but are there any laws against giving a known murderer the name of a person you believe he is then going to go kill?

      • They mention above that Batman has (and Reese knows this) the resources to better protect himself as well as the ability to seek police protection which makes a ‘lesser of two evils’ argument.

        If Reese simply gave the Joker Batman’s name while Batman was crippled and didn’t attempt to warn him you probably could get him on aiding and abetting, but I’m not sure if that would apply here.

  4. On part I, there seems to be a problem. The rule states that
    “then the lawyer shall proceed as is reasonably necessary in the best interest of the organization. Unless the lawyer reasonably believes that it is not necessary in the best interest of the organization to do so, the lawyer shall refer the matter to higher authority in the organization, including, if warranted by the circumstances to the highest authority that can act on behalf of the organization as determined by applicable law.”

    However, based on Reese’s blackmail attempt, it is quite clear that he knew Fox already knew about the embezzlement. If the CEO is involved in embezzlement, reporting the embezzlement to the CEO hardly seems to be “in the best interest of the organization”. In fact, letting the CEO know that you are on to them gives them ample opportunity to hide cover their tracks, run away, take the embezzled funds out of US jurisdiction etc… It seems to me the appropriate action would be to report either to the CFO, COO, CLO or possibly the board.

    • This is another case of “variations on a theme”. Bruce has been presented in pretty much every role with regard to Wayne Enterprises… as an active, effective CEO, as a figurehead CEO, as a large (but not controlling) shareholder with a seat on the board, as a large (but not controlling) shareholder who rules by proxy, as a disinterested shareholder, and even as an outsider. (Even Wayne Enterprises itself has been presented in various forms… as a private company, and as a public one.) Each of these presents a different solution to the question of ficuciary duty to Wayne Enterprises’ non-Bruce-Wayne shareholders. Fiduciary duties, of course, apply not just to WE’s lawyers, but also the accountants and executives and Bruce himself.

      If WE is a public company AND Bruce has been taking assets out of the company (or more likely, companies), whether it be prototype equipment, materials, money, or making unauthorized use of Waynetech’s IP, then there is a potential shareholder suit out there, in addition to all the things hitting the fan, should Wayne’s identity as Batman become known to the public.

      • My point was more that Reese instead of referring the matter to an officer who would act in the best interest of the firm referred it to a person involved in the embezzlement. Someone whom Reese knew would at best do nothing but more likely would cover the tracks and destroy the evidence. That hardly seems like “proceed[ing] as is reasonably necessary in the best interest of the organization”. I don’t think he discharged his obligations properly in this case. He should have gone to someone who was not involved in the embezzlement. (I assumed the CFO would be a likely good candidate since making sure all the company’s money is accounted for is part of their job and they usually have board-access, so he could probably jump over the CEO’s head)

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  7. All this analysis is under legal ethics, which I don’t believe Reese was. I’m wondering if there are any accountants or financial analysts who could opine on the relevant professional standards to their profession. I doubt they hold themselves to the ABA Model Rules standards.

    • Ryan Davidson

      Movie explicitly says that he was. I wondered about that, so I went back and found the clip. It’s there.

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