The following is a summary of the use of the term "Chinese Wall" in legal
writing. Delete now if you are not interested in this topic!
Summary: The phrase "Chinese Wall" has been used in court decisions and
legal writing for approximately ten years. Apparently, it was a reference to
the defensive wall built between China and Mongolia in the third century BC
and started out as a reference in the stock exchange and financial circles to
be a prohibition against the passing of confidential information from one
department or financial institution to another. Although the term apparently
started with a racially neutral connotation, because some consider it to have
a discriminatory flavor, the term "ethical wall" is now favored in its stead.
Details: Before it came into use in legal writing, the term apparently was
used in a financial setting. Angela Rose wrote that Baron's Dictionary of
Finance and Investment Terms has the entry "Chinese Walls" as an imaginary
barrier between the investment banking, corporate finance, and research
departments for Brookridge House and the sales and trading departments... SEC
and Stock Exchange Rules mandate that a Chinese Wall be erected to prevent
premature leakage of this market - moving information.
There are seven entries for the phrase used in appellate decisions in the
1997 supplement to volume 7 of West’s Words and Phrases. One case summarizes
the term "Chinese Wall" as a device erected by a law firm intended to
quarantine a new member with confidential information received from adversary
of one of the firms clients.
I have limited my search of actual cases to California
decisions and decisions of the Ninth Circuit and Federal District Court cases
in the Ninth Circuit (CD ROMs we carry in our library).
There are nine California case, two of which use the term "Chinese Wall", in
the context of zoning and growth restriction cases. Five of the cases use
the term in the context of lawyer disqualification cases with no reference as
to whether the term is objectionable or not.
Justice Low in Peat, Marwick, Mitchell and Co. v. Superior Court , 200 Cal.
App. 3d 272, 293-94, 245 Cal. Rptr. 873 (1988) wrote a concurring opinion
"...to express my profound objection to the use of this phrase in this
context...the term has an ethic focus which many would consider a sort or
form of linguistic discrimination...modern courts should not perpetuate the
biases which creep in the language from outmoded, and more primitive, ways of
thought." He concludes that "it is necessary to raise a clenched cry for
jettisoning the outmoded legal jargon of a bygone time. If the image of a
wall must be used, perhaps 'ethics wall' is more suitable phraseology.".
Apparently, other courts have followed this suggestion, in
Hendrickson v. Great American Savings and Loan (1992), 11 Cal. App. 4th 109,
14 Cal. Rptr. 2d 184, the court cited some materials using the phrase
"Chinese Wall" but stated "we prefer to use 'ethical wall' rather than the
more common and often criticized term 'Chinese Wall'.".
A review of the federal cases (9 in the Ninth Circuit and 6 in
the Ninth Circuit F. Supp. Cases) yields about the same result. In Employers
Ins. Wasau v. Albert D. Seeno Const. Co. 692 F. Supp. 1150 (N.D. Cal. 1988)
the court cited the Note, The Chinese Wall Defense to Law Firm
Disqualification 128 U. Pa. Law Rev. 677 (1980) but added "cognizant that
many find the term 'Chinese Wall' offensive [citation omitted] as well as
that the term may be confused with a flimsy paper petition rather than the
awesome Great Wall of China from which it is actually derived...the court
elects to use the term 'ethical wall'.".
Many who have responded to my law lib message indicated that their firm's
preferred use is now "ethical wall". One final interesting note is that our
library has both the 1992 "Modern Dictionary for the Legal Profession" and
the 2nd edition of 1996. There is an entry in the 1992 edition for "Chinese
Wall" describing the procedure regarding isolation to avoid law firm
disqualification. The 1996 version in the entry for "Chinese Wall" states
"see Ethical Wall". That entry describes the disqualification procedure and
also states "formally known as the Chinese Wall, the ethical wall attempts to
control or avoid client conflicts." Therefore, there is an apparent
recognition that the term was no longer considered acceptable. Searching
cases using the phrase "ethical wall" yields several newer cases using this
terminology.
Thanks to all of you who responded and were interested in this topic. I now
think I would prefer to be a reference librarian than more of an
administrative type. I should have done more of my own research before going
to the list but the thought nagged me after leaving the CLE training session
feeling that the training judge was using a term that would not be acceptable
to a number of people. I recall when I first read Thurgood Marshall and
others using the term "African Americans" instead of blacks that sounded
jarringly on my ear. Again, I guess I should stick to my philosophy that it
makes life simpler to call people what they want to be called. Some
responded that they did not think that the term was objectionable but as long
as some do I guess we should honor that preference.
Thanks to the many helpful contributions including those from Mary Whisner,
Bob Ryan, Leslie Forrester, James Spence, Angela Rose, Wendy Ng, Martha
Goldmen and many, many others. If you have read this far you are entitled to
one hour CLE credit for ethics! Thank and best regards...Alan Dear.
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
Alan E. Dear, Director 011-671-477-7623
Guam Territorial Law Library 011-671-472-1246 - Fax
141 San Ramon Road Aldear@AOL.com
Agana, Guam 96910
Guam ("Where America’s day begins") is a U.S. Territory in the Western
Pacific (above the Equator) just west of the international date line. We are
18 hours ahead of Pacific Standard Time. U.S. postal rates apply (including
4th class library rates). Our library is a federal and Guam tax exempt
non-profit corporation and donations are tax-deductible.
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