Is it ethical for a lawyer who is suing a corporation to try to ferret out information from the corporation's employees?

The legal profession has a formal guideline on the question, but it is open to many interpretations.

The New York Court of Appeals last month came out with an official reading of the code provisions that gives neither side all it hoped for.

The central problem is that while the law looks on a corporation as a person, it obviously isn't one.

The rule says that a lawyer representing Ms. Jones in a suit against Mr. Smith may not go behind the back of Mr. Smith's lawyer and communicate directly with the defendant, hoping to get either an inadvertent disclosure or agreement to an disadvantageous settlement.

It's tricky to decide to whom the ban applies when the defendant is not Mr. Smith but Smith Corp.

Plaintiff lawyers admit that some employees of the corporation are off limits, but they insist the ban should apply only to the corporation's "control group" -- the most senior officers who have substantial control over the entire operations.

Defendant companies, not surprisingly, say that the ethical rule precludes conversations with anyone on the company payroll, no matter how lowly his or her job.

Of course, no one is off limits when it comes to collecting information that might be helpful at a trial.

The issue is how that information is collected. If it has to be done formally, through court-supervised depositions, that can run up the cost of data collection considerably.

And even if the interviews are less formal but with the corporation's lawyer present, that can make the process take a lot longer.

The justices at New York's highest court wanted to keep the interviewing process as informal as possible.

They called it important that the cost not be so high that some worthy plaintiffs would simply not be able to pursue a suit.

And they also said that gathering all the facts quickly can let each side see how strong their position is, leading to quicker settlements.

On July 5, they handed down a middle-of-the-road solution in a personal injury case in which the plaintiff's lawyer wanted to interview witnesses to the accident.

The ruling in Niesig v. Team I said that unless the company's lawyer was present, the plaintiff's lawyer could not talk to employees important enough in the specific subject matter of the suit to take actions that bind the corporation or to those employees who, in making decisions, were carrying out the advice they had gotten from company lawyers.

Anyone else is fair game. The justices acknowledged that the rule poses some risk to the corporate defendant.

They had some advice: The company lawyers should get to the employee witnesses first, and make sure that they don't make "improvident disclosures" in their interviews with the other side.

In other cases, courts ruled that:

Mergers between head-on competitors may be lawful if the companies sell to sophisticated buyers. That was a key point to the U.S. Court of Appeals in Washington in overturning Justice Department objections to a merger of two major manufacturers of underground drilling equipment.

Worries that the merged company could dominate the industry and set prices unfairly high were brushed aside by the judges, who pointed out that each piece of equipment costs hundreds of thousands of dollars and that buyers therefore know what they should pay and often demand competing bids.

(U.S. v. Baker Hughes, July 6) Those who disagree with their tax bills cannot be lazy about making their case. As a general matter, once a court has decided an issue, the same parties cannot litigate it again.

But a couple said that an exception to that rule should exist for cases decided not on the basis of legal arguments but simply because one side never pressed the case.

The taxpayers had challenged alleged tax deficiencies and penalties in the U.S. Tax Court, but never pushed their case.

The court eventually threw it out.

The couple then brought an action in the U.S. District Court in St. Paul, where the government insisted that the controversy was already closed.

The judge agreed, saying that a default judgment, like any other resolution of a suit, is binding on subsequent proceedings.

(Steffel v. U.S., July 9) It's all right for a business to take action against a distributor for supporting the "wrong" congressional candidate. The U.S. Court of Appeals in St. Louis ruled it was legal for an insurance company to cancel its contract with an agent who raised money for an opponent of an incumbent member of Congress favored by the insurer.

The agent claimed the action violated the prohibition in the 1871 Ku Klux Klan Act against using intimidation to curb a person's political activity.

However, the judges found that the law was aimed at stopping murders and beatings, not merely injuring a person by removing the chance to earn some commissions.

(Gill v. Farm Bureau, July 2) The government has to listen to an applicant's own doctor in deciding whether the patient is unable to work. The Department of Health and Human Services, in evaluating whether persons with ischemic heart disease are disabled, relies on electrocardiogram readings while the patient is walking a treadmill.

The U.S. Court of Appeals in New York called that policy a violation of the Social Security Act requirement that each disability claim get individualized treatment.

The judges also told HHS to weigh doctors' opinions and the patient's medical history; they found that simply using the EKG tracing led to too many truly disabled persons being denied benefits.

(New York v. Sullivan, June 27)

Daniel B. Moskowitz is a Washington editor for Business Week newsletters.