In re Gatti

Government lawyers advised law-enforcement officers to go undercover, i.e., to misrepresent their identities and purpose, in order to investigate possible illegal conduct. This undercover operation led to charges against several chiropractors who were represented by lawyer Daniel Gatti (defendant). Gatti filed a complaint with the state bar (plaintiff), arguing that the government lawyers had violated the rules of professional conduct by using the officers to make misrepresentations to third parties. The state bar issued an opinion stating that the government lawyers had done nothing wrong. A year later, one of Gatti’s clients had an insurance claim denied after it was reviewed by a medical-review company. Gatti had reason to believe the medical-review company was committing fraud to save money for its insurance-company clients. To investigate the possible fraud, Gatti made undercover phone calls to (1) a medical reviewer who worked for the medical-review company and (2) one of the company’s executives. In both calls, Gatti either impliedly or directly misrepresented who he was and why he was calling. Gatti later sued the medical-review company and others for fraud. The medical-review company’s executive filed a complaint with the state bar, claiming that Gatti had violated the rules of professional conduct by making misrepresentations during the phone calls. Gatti’s defense was that Gatti had relied on the state bar’s opinion approving the government’s undercover conduct and that there should be exceptions to the rules for misrepresentations made during an investigation. The trial court found that Gatti was guilty of the violations but did not sanction him because he had relied on the state bar’s opinion. The Oregon Supreme Court reviewed the ruling.