Advise me please: Should a federal trial judge demand to know who is paying the attorney fees?

I have been concerned for a long time about situations where someone or something is paying the attorney fees of a party to a civil or criminal case but the judge doesn’t know it. For present purposes, I am not concerned with (1) standard insurance defense relationships that are set out in detail in insurance policies or (2) criminal cases where a lawyer is appointed by the court and the fees are being paid by the government.

Two examples (none of which are drawn from a particular case) are illustrative:

1.  On the civil side, a corporation employs a highly regarded mid-level sales manager. The manager is alleged to have sexually assaulted an employee of a catering company at a private party.  The corporation has nothing to do with the party. The party was held across the river in another state.  A civil suit is brought by the alleged victim against the mid-level manager in federal court on the basis of diversity. The mid-level manager has no insurance that would cover the claim, and turns to his employer for help.  Perhaps because the fellow is both well-liked and a high producer, the outfit tells the employee not to worry about attorney fees. The company’s outside private counsel enters an appearance for the employee to defend the federal civil suit.

2. On the criminal side, a highway patrol trooper stops a truck supposedly hauling cargo pallets of fertilizer. Arvo, the drug dog, hits on the truck, and way back among the 100 or so pallets of fertilizer is another pallet that looks exactly the same.  However, that pallet contains 50 kilos of cocaine. The driver is charged with a federal drug crime. Perhaps for the love of his nephew who he raised as a young boy, the driver’s uncle engages a local criminal defense lawyer, and wires the lawyer a large retainer with a promise to pay more if needed. The criminal defense lawyer speaks with the driver, tells the defendant of the uncle’s help and then enters her appearance for the defendant in the federal criminal case.

For present purposes, and short of disclosure to the court, I don’t care about what the lawyer must do to comply with ethics rules. Nor do I care about what steps the lawyer takes to formalize things with the client and the party who will pay the fee prior to entering an appearance. Additionally, I am not now concerned with multi-party representation issues and requirements under Federal Rule of Criminal Procedure 44(c).

What I do want to know is this: “As a regular practice (set forth in a local rule or otherwise), should a federal trial judge routinely require that the facts and circumstances of all non-party fee paying arrangements be disclosed to the judge in situations similar to the ones described above?”*  

Truly, I don’t know the answer to my question.  So, I look forward to your help.


*Feel free to take a shot at proposing a local rule.
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