New York DR 7-104 (a)(1) - Interpretation

In Niesig v. Team I (76 NY2d 363, 558 NE2d 1030, 559 NYS2d 493 [1990]), the Court of Appeals considered the implications of that rule and whether employees of a corporation being sued were considered "parties" within the meaning of DR 7-104 (a) (1). The plaintiff in Niesig moved after commencement of the action for an order permitting counsel to conduct a private interview with those employees of a corporate third-party defendant who witnessed the accident. The court construed the term "party" as it is used in the disciplinary rule "to include corporate employees whose acts or omissions in the matter under inquiry are binding on the corporation (in effect, the corporation's 'alter ego') or imputed to the corporation for purpose of its liability, or employees implementing the advice of counsel" (Niesig at 374) and to exclude "employees who were merely witnesses to an event for which the corporate employer is sued" (id. at 375). The Court ultimately held that none of the employees was a "party" pursuant to DR 7-104 (a) (1) and thus the motion to allow plaintiff to informally interview the corporation's current employees was properly granted. The Court underscored the importance of informal discovery practices in litigation--in particular, private interviews of fact witnesses that have the potential to streamline discovery and foster the prompt resolution of claims (Niesig, 76 NY2d at 370). A blanket ban on informal interviews of corporate employees was undesirable because it would: "[C]lose[] off avenues of informal discovery of information that [might] serve both the litiga[tion] and the entire justice system by uncovering relevant facts, thus promoting the expeditious resolution of disputes. Foreclosing all direct, informal interviews of employees of the corporate party unnecessarily sacrifices the long-recognized potential value of such sessions . . . Costly formal depositions that may deter litigants with limited resources, or even somewhat less formal and costly interviews attended by adversary counsel, are no substitute for such off-the-record private efforts to learn and assemble, rather than perpetuate information" (76 NY2d at 372).