July 14, 2007
Get It In Writing
A divorcing wife retained a law firm to represent her. The husband, a physician, did not submit information regarding the value of his medical practice and its real estate. The wife's lawyer advised her to get an independent valuation. The wife rejected the advice and proceeded to trial, where she was not awarded any part of the medical practice or real estate.
The firm sued the wife for legal fees of slightly under $3000. The wife counterclaimed alleging malpractice. The firm prevailed on its fee claim and on the malpractice counterclaim. On appeal, both determinations were affirmed by the Connecticut Appellate Court. Error in the malpractice jury instruction did not provide a basis for reversal.
Practice note: the firm got a signed statement from the client confirming her rejection of its advice. (Mike Frisch)
July 13, 2007
Let's Go To The Videotape
An attorney in Louisiana won a $1.5 million judgment in a case before the appropriately-named Judge Green. The judge then sought and obtained an $800 contribution purportedly for the judicial campaign of his niece, who is the daughter of now-indicted Congressman William Jefferson. The payment was caught on videotape, leading to criminal charges against the judge and disciplinary charges against the attorney.
The Louisiana Disciplinary Board has recommended a one year suspension with six months stayed. A dissent calls for a more substantial sanction. (Mike Frisch)
Lawyer Advertising: Progress Report
Minnesota Public Radio has an article with audio link on the state of lawyer advertising. One of the ads discussed is from a Chicago law firm that put up a billboard with the slogan "Life's Short. Get a Divorce." (Mike Frisch)
July 12, 2007
Due Process For Lawyers
The Ohio Supreme Court ordered permanent disbarment in a case where the attorney was found to have, among other things, falsified deeds and taken financial advantage of an elderly client. The court rejected a claim that Ohio disciplinary procedures violated due process: "[The attorney] analogizes the disciplinary process to a capital-murder prosecution arguing that the process unfairly precludes a lawyer from first pressing a defense and then choosing to show remorse in mitigation..."
A dissent would find that the attorney's due process rights had been violated, but not for the above-rejected reason. Counsel for the accused attorney lived in Michigan. The night before the scheduled oral argument (Valentine's Day), a snowstorm "wreaked havoc on travel" throughout the mid west. Counsel's flight to Ohio was canceled. Driving conditions were impossible. He promptly called the court seeking a continuance, which was "administratively denied." The dissent would hold that, under the circumstances and given the gravity of the matter, the denial of oral argument amounted to a due process violation.
In D.C., they do give attorneys a bifurcated hearing that allows the "I'm not guilty, but if you find I am, I'm really, really sorry and will never do it again" approach. The hearing committee is not permitted to be informed of prior public discipline against the lawyer until after it has made a preliminary finding that the accused attorney engaged in misconduct. (Mike Frisch)
The GC's Client from Hell
Posted by Jeff Lipshaw (cross-posted at PrawfsBlawg)
Yesterday I offered up some views on the Whole Foods/Wild Oats merger, particularly the Whole Foods CEO's ill-advised e-mails to board members. It turns out the hypothetical conversation I posited would never have occurred. It has now come to light that this guy is the client from hell.
Now I should note that I love Whole Foods. I would have to, to pay the premium one pays there, particularly when the low fat ice cream selection stinks as badly as it does. And I should also say that a general counsel calling his or her CEO a "client" is an undue formalism that would probably portend a disastrous relationship were the GC actually to see it merely as "lawyer-client" as opposed to "don-consigliori" or "friend-friend." But I digress.
Oh my god. He was on the freaking Yahoo chatboard. Under a pseudonym it would take most of the Yahoo chatboard psychos about ninety seconds to figure out. (N.B.: the Yahoo chatboard is to publicly traded stocks what lawschooldiscussion.com is to law school admissions.) I once was the general counsel to a CEO with hyper-sensitivity to what was said on the board, and more than once I threw myself bodily across his computer keyboard to stop him from going online to respond to comments about him or the company. Not only do you have the obvious securities disclosure issues; not only do you have the "gold medal in the Olympic ten meter stupid embarrassment" event; but you also have the issue whether the company has endorsed the chatboard as an authorized outlet for company discussion, thus, at least in theory, making the company liable for the various defamations of its executives and their families that occur on a daily basis.
A Bad Day
A few weeks ago I posted a bar discipline decision from the District of Columbia Court Of Appeals and indicated my approval of the court's application of common sense to a case involving the regulation of its Bar. Two actions of the court today cause me concern about the direction in which we are headed.
First, and of particular importance, the court promulgated proposed revisions to its rules of enforcement in response to proposals submitted by the Bar's Board of Governors. Some of the revisions are quite useful, in particular the streamlining of the process of handling reciprocal discipline matters. Unfortunately, the proposal for consent dispositions (see Section 12) requires a virtual four-step process--approval of the agreed disposition by an attorney who sits on a hearing committee followed by review of a full hearing committee (in effect a mini trial), the Board on Professional Responsibility and then the court. It can break down anywhere along the way if there are any glitches and can't be used for cases of first impression, whatever that means. A sensible Bar Counsel would never waste time trying to achieve a consent under the rule--it is easier and faster to try the case. Prediction: there will be no consent dispositions in D. C. bar cases, which is what the bar committee that studied the issue really wanted all along. Efficiency and prompt resolution of charges be damned.
Second, the court reinstated an attorney disbarred in 1998 for an income tax evasion conviction. The board found the attorney had made "significant efforts over the past several years to reach an agreement with the IRS" although it appears that no restitution has been paid. No big deal-- all he has to do is submit a restitution plan in 30 days and semi-annual proof of payment until it is paid in full. No indication of what the consequences will be if he fails to do so, as he has for almost a decade. I must say that I am not in favor of the "reinstate now, pay later" approach adopted here. Disclosure: I handled the disbarment. (Mike Frisch)
July 11, 2007
How to Practice Preventive Antitrust Law: Lessons from Whole Foods
Posted by Jeff Lipshaw (and cross-posted at PrawfsBlawg)
Gordon Smith has some commentary over at Conglomerate on the FTC's decision to challenge the Whole Foods-Wild Oats merger, and, trust me, the entire M&A antitrust bar has to be silently grinning with a soupcon of schadenfreude. I should note this also raises the issue into which I waded several weeks ago at MoneyLaw and LPB - does the New York Times test mean don't write what you don't want published, or does it mean don't do what you don't want published.
The critical question is the definition of the relevant product market. If it's all grocery stores and supermarkets, the deal goes through without much of a flurry. But if the market is "organic and natural foods supermarkets and groceries" maybe it is concentrated enough to merit challenge under the FTC's Merger Guidelines. The guidelines themselves (at least last time I looked) took a hypothetical market and tested whether a player could hold a non-transitory five percent price increase. If it could not, then the market definition needed to be expanded.
I used to tell clients that their image of FTC lawyers as impartial regulators interested in nothing more than truth and justice, but eager and ambitious litigator/prosecutors looking to put notches on their holsters. These notches would lead to advancement in the agency or to lateral partnerships at Wall Street firms. Some of my best friends advanced this way. So that when you gilded the lily by overstating or misstating the reasons for an acquisition in some ill-chosen memorandum (usually written by the investment bankers), you were creating good old-fashioned understandable evidence.
In this case, the Whole Foods CEO sent an e-mail to the board listing as the top two reasons for the acquisition: "Elimination of an acquisition opportunity for a conventional supermarket" and "Elimination of a rival." Two reactions: (1) Damn! You can do all the training and prophylactic work you want with your business people, but CEOs still write these damn e-mails (which constitute 4(c) documents) without showing them to you, the general counsel; and (2) I could re-write the two reasons to say almost the same thing without the incendiary effect: "Enhance our ability to compete against the more powerful and resource-laden supermarket chains who are bound, in view of the low barriers to entry, to provide the kinds of natural and organic products we do" and "Achieve cost, marketing, and sales synergies through rationalization of locations, more efficient advertising budgets, and other efficiency moves."
General Counseling 101: If the CEO had sent the draft e-mail to me, we would have had the following conversation:
Lipshaw: "The e-mail is fine if that's what you really mean, but I think you are using loose language and it comes out contrary to your intent."
Lipshaw: "You have made it sound like you are trying to eliminate competition, when in fact you know that Kroger, Safeway, Meijer, and Winn-Dixie could crush us tomorrow in one fell swoop. Marsh in Indianapolis is already taking share from us with their organic and natural section. So "eliminating" Wild Oats wouldn't do a damn thing."
CEO: "That's true."
Lipshaw: "So why write it that way? It's red meat to the FTC carnivore! You don't need this puffing to persuade the board it's a good deal."
CEO: "How would you do it?"
Lipshaw: "Doesn't this sound more like why we are REALLY doing this deal?" [Reads bullet points from above].
CEO: "Yeah! That's good. Read again to me slowly so I can get it down."
Lipshaw: "I will e-mail it to you. And, by the way, thanks for originally sending me your draft labeled 'Subject to attorney-client privilege. Review draft for legal review before distribution" just like I taught it to you."
CEO: "Well, you've just earned your outrageous stock compensation for this year."
As I said, this story is the poster child for getting good legal counsel.
A Tricky Situation
What is an attorney's ethical obligation if she believes that a client was mistakenly paid about $12,000 more than the amount to which the client was entitled? What if the client refuses to pay the overage and tells the attorney that the money is spent? The client has a duty of candor to the tribunal that had miscalculated the payment that trumps the duty of confidentiality, according to an opinion of the Ethics Advisory Panel of the Rhode Island Supreme Court. The attorney is obligated to disclose if she is unable to persuade the client. The inquiry involved an award of additional disability benefits by an administrative law judge. (Mike Frisch)
Duty Of Loyalty To Former Client
Two defendants, who resided together as boyfriend and girlfriend, were convicted of offenses involving the death of the woman's five-month-old child. An attorney who had been initially appointed to represent both was permitted to represent only the boyfriend at trial after he had been relieved of the girlfriend's case. The attorney then cross-examined his former client at the trial: "This conflict culminated in the ghastly unrestrained process of [the former client's] cross-examination by [her former lawyer] at trial."
The Court of Appeal of Louisiana, Second Circuit, reversed both convictions. The court held that such adversity to a former client in the same matter involves an actual conflict. Thus, "it need not be shown that the divided loyalties actually prejudiced the defendant in the conduct of the trial." The boyfriend's conviction was reversed because he "was never advised of his right to obtain conflict-free counsel." (Mike Frisch)
Two plaintiffs who had retained a law firm filed a class action against the retained attorney, his firm and the firm's directors. The allegation was that the clients had been overbilled for legal services. The Court of Appeal of Louisiana, Third Circuit affirmed the trial court finding that the charges were impermissibly vague as to the firm and the individual directors: "requiring the defendants to produce files, billing statements, and client contracts in these circumstances and for this type of broad allegation would essentially require those defendants to sustain the burder of disproving the case brought against them." Dismissal against the responsible lawyer was deemed premature. (Mike Frisch)
Threats And Violence Bars Admission
The New York Appellate Division, Third Department denied admission to an applicant who has a criminal conviction that involved domestic violence and threats against a judge. The court's Committee on Character and Fitness had recommended against accepting the application. The applicant had passed the bar exam. (Mike Frisch)
Darian Ibrahim's Paper on Angel Investor Contracts
The Conglomerate Junior Scholars Workshop continues, with a neat paper from Darian Ibrahim on angel investors and a series of responses from luminaries like Larry Ribstein, Barbara Black, George Dent, and David Hoffman.
For the uninitiated, angel investors are those brave souls who put the first significant money into a start-up enterprise. They overlap on the more developed end with venture capitalists, and on the less developed end with the holy triad known as "FFF:" friends, family, and fools.
Being the hedgehog I am (wandering, I think, in the instant classic Solum sense - how does he do it?) about the lawyers' impulse toward a certain kind of rationality, and underlying (and autopoietic - look that one up!) presumption that the impulse is correct, I supplied a lengthy comment to Christine Hurt's intro to the discussion.
July 10, 2007
Marquette to Host Dispute Resolution "Works in Progress" Conference
One of our favorite people, Andrea Schneider (Marquette, right) passes along the news that Marquette Law School will be holding its First Annual Dispute Resolution Works in Progress Conference on October 19-20, 2007. "The Conference is an opportunity for scholars from all over the country to meet others who are teaching and researching in dispute resolution. Join us and present your recent scholarship or works in progress, get feedback from colleagues, and learn about other research projects underway. Although we encourage you to share your current endeavors, you do not need to be a presenter to attend." More at the conference web page.
Another Cautionary Tale
A recent hearing committee report in a Louisiana bar discipline matter tells a tale of the dangers of personal involvement with a client, particularly in the context of a domestic relations representation. The lawyer was retained by a divorcing wife. There was conflicting testimony about who pressed for an intimate relationship. In any event, the relationship began when the lawyer and client celebrated the successful resolution of the case. They traveled to Florida and stayed together, but the client trusted her babysitter with the information. The babysitter told the husband. After the next hearing, the husband's lawyer (who is named Rodney Rabalais) confronted the attorney. The husband entered the wife's home, obtained proof of the Florida trip and disclosed the information to the attorney's spouse. The attorney ended the intimate relationship, suggested new counsel and withdrew from the case. Her new attorney is Angelo Piazza (Louisiana must lead the country in lawyers with interesting names).
The attorney learned that the husband intended to file a disciplinary complaint and self-reported the matter to disciplinary counsel. Charges of conflict of interest were filed. The hearing committee was quite sympathetic to the lawyer, finding that his testimony was "stirring", that he was remorseful, that his conduct had done lasting damage to his 32 year marriage and impacted on his two sons, both of whom intend to be lawyers. The hearing committee did not think so highly of the former client, who has filed a civil claim against the lawyer. They recommend a three month deferred suspension with two years probation, ethics school and payment of costs. (Mike Frisch)
Next Stop Graniteville
A lawyer who was admitted in Louisiana and South Carolina practiced law only in Louisiana. After a train derailment in Graniteville, South Carolina, he opened a law office there and aggressively attempted to solicit victims as clients. His newspaper ads and mail solicitations claimed an expertise that the lawyer did not have and inaccurately suggested the extent of his local ties. Disciplinary charges were brought and the South Carolina Supreme Court imposed an agreed public reprimand. (Mike Frisch)
Ph.D.s for Law Professors?
Posted by Jeff Lipshaw
There's an interesting thread over at PrawfsBlawg (where I am guest-blogging this month) on the question whether it takes a Ph.D. (not a village!) to teach a lawyer, touched off by a post from Jonathan Simon (Boalt, left). I'm simply going to replay here my comment about one of Jonathan's observations:
As for whether police officers or corporate compliance officers might compete to teach at law schools, even without a JD, its an interesting proposal. The question would be whether they have the capacity for a sophisticated and reflexive view of their own practice worlds, and the tools to unpack that view.
Having just recently written about what it would take to make the jump from the practice to the academy, I think this observation cuts to the heart of it. There's probably a continuum between pure theory and pure practice arts, and the Ph.D. is no doubt a good signal that one has passing familiarity with the former. Whether that leaves the teacher unprepared to deal with the other end of the spectrum is an interesting question. But I think that the difference between, say, a CLE class and a law school class is the introduction of some meta-consideration to the practice matters under consideration, at least to some degree. When the long-time practitioner is trying to persuade law professors that she is appropriate professor material, it's the presumption that the ability to have a sophisticated and reflexive view and the ancillary tools has atrophied that is one of the major hurdles to overcome.
July 9, 2007
"Breaking" Britney Civil Procedure News!
Posted by Allison Hayward
Of course, those of you who read the July 16 issue of the National Enquirer (available at newstands now, but online in a couple of days) probably saw this already, but for those who missed this story - Britney has has a "shocking confrontation" with her mother, and has spelled out "demands" 'in a stunning legal document" she "served" to her mother.
A letter "written in the form of a poem" hinted at "dark secrets" and was accompanied by "legal papers" (apparently a "motion" she "intends to file" in court if mom doesn't stop "meddling in her life") as well as a copy of Britney's new will. Her new estate plan cuts mom from the picture, and leaves her bounty to her sister, according to the Enquirer.
"Britney felt she didn't have any choice but to draft legal documents to file against Lynne if she does not stay away from (Britney's ex) Kevin."
What's wrong with this picture? (Besides the notion that Britney Spears is out there somewhere drafting "legal documents") California, like most jurisdictions, does not permit service by a party.
So whatever this was, it wasn't "service."
Want to help? You could start with Larry Rudolph, her longtime (and perhaps present) manager, who has a MySpace page.
How To Handle A Disciplinary Complaint
A lawyer who was charged with neglect of two clients' cases was censured, rather than suspended, because his approach to the disciplinary case was textbook perfect. The Appellate Division, Fourth Department imposed the sanction and noted that the attorney has cooperated with the disciplinary process and admitted the ethical violation. The attorney established that his inattention to client matters was related to ongoing personal domestic problems and that he had established office procedures that would help prevent recurrences of the misconduct. Most importantly, the court was clearly influenced by the attorney's "expressions of extreme remorse."
The link takes you to the court's web page--the case is P-07-014. (Mike Frisch)