December 5, 2009
Conference on Transactional Education - Emory Law School, June 4-5, 2010
Posted by Jeff Lipshaw
Emory University School of Law’s Center for Transactional Law and Practice is delighted to announce its second biennial conference on the teaching of transactional law and skills, Transactional Education: What’s Next? The conference will be held at Emory Law on Friday, June 4, and Saturday, June 5, 2010.
We are accepting proposals immediately, but in no event later than 5:00 p.m., February 1, 2010. We welcome proposals on any subject of interest to current or potential teachers of transactional law and skills.
To find out more information about the conference or how to submit a proposal, visit the conference website.
The Steering Committee
Tina L. Stark, Chair, Emory University School of Law
Danny Bogart, Chapman University School of Law
Deborah Burand, University of Michigan Law School
Joan MacLeod Heminway, The University of Tennessee College of Law
Jeffrey Lipshaw, Suffolk University Law School
Jane Scott, St. John's University School of Law
December 4, 2009
Not Endorsed By The Times
The New York Commission on Judicial Conduct has admonished a judge of the New York City Civil Court for New York County based on allegations that the judge personally had solicited campaign contributions and that her campaign literature misrepresented that she had been endorsed by the New York Times and "displayed a pro-tenant bias." The commission and the judge stipulated to agreed facts and the sanction.
A dissent would find two of the charges defective and the agreed statement inadequate and would find that a third claim of misconduct "never should have been brought." The dissent states:
To condone the judge's acquiescence to this disposition degrades the Commission. Notwithstanding that the agreed sanction allows [the judge] to continue to wear her robes and allows her to avoid further expensive and onerous Commission proceedings, I believe that we should refuse to strike this pragmatic bargain when basic ethical principles of judicial conduct are at stake.
The exhibits may be found through this link to the commission's web page. (Mike Frisch)
Admission Sufficient To Accept Resignation
The New York Appellate Division for the First Judicial Department has accepted the resignation and struck from its rolls an attorney in the wake of findings of dishonesty in eviction litigation. The court notes:
...this Court granted the Departmental Disciplinary Committee's petition, based upon collateral estoppel, and found that respondent was guilty of professional misconduct in that he engaged in conduct involving dishonesty, fraud, deceit or misrepresentation in violation of Disciplinary Rule 1-102(A)(4); that said conduct was prejudicial to the administration of justice in violation of DR 1-102(A)(5); and that such conduct adversely reflected on respondent's fitness to practice law in violation of DR 1-102(A)(7).
These findings were based upon a determination in Civil Court, New York County (Gerald Lebovits, J.) that respondent had asserted, under oath, in a 2005 nonpayment proceeding, on more than one occasion, material factual statements that were false. That court also imposed a $10,000 sanction against respondent for engaging in frivolous conduct during the course of the nonpayment proceeding (see 1050 Tenants Corp. v Steven Lapidus, 13 Misc 3d 1220[A], 2006 Slip Op 51925U, aff'd 17 Misc 3d 133[A], 2007 NY Slip Op 52049U). This Court's June 5, 2009 order referred respondent's matter to the Committee for a hearing solely on the issue of sanction.
The court found the admissions in the resignation sufficient:
Respondent has chosen to submit his resignation pursuant to 22 NYCRR 603.11. In his affidavit in support of his resignation, he states that he is resigning from the Bar; that his resignation is rendered freely, voluntarily, and without coercion or duress; that he is fully aware of the implications of submitting his resignation and of the disciplinary proceedings against him; and specifically acknowledges that he has already been found guilty of professional misconduct as per this Court's June 5, 2009 order. He acknowledges that, in light of the invocation of the collateral estoppel doctrine and the order of this Court, his misconduct is deemed established and the only issue at the impending hearing would be the sanction to be imposed upon him. In explaining his decision to resign, respondent states "I have retired from the practice of law and believe that it would make little sense to expend court resources, Committee resources and my own financial resources in defending this matter."
Counsel for the Committee states that he is satisfied that the affidavit conforms with the requirements set forth in section 603.11.
A comparison of the requirements in 22 NYCRR 603.11(a)(2) and (3) with the language in respondent's affidavit finds that the affidavit is not in technical compliance, since respondent did not specifically identify the nature of his misconduct, and did not actually state that he could not successfully defend himself on the merits against the charges. Nevertheless, we conclude that sufficient is admitted in the affidavit to find that respondent admits that his guilt was established by this Court's June 5, 2009 order. This order, in turn, was based upon the Civil Court findings that he had engaged in making multiple perjurious statements in a judicial proceeding. His admission that "it would make little sense" to expend, inter alia, his own financial resources in defending this matter is deemed an admission that he cannot successfully defend himself on the merits.
A Bump In the Road
An Arizona hearing officer has recommended the censure of an attorney who is a certified specialist in personal injury and wrongful death. He had a number of clients who faced "challenging financial circumstances" and arranged loans to clients through an arrangement by which the loans were made by another attorney secured by promissory notes. The attorney lent money to the other lawyer from personal accounts when the other lawyer did not have money to fund a loan. The attorney knew that the other attorney made loans through checks written on a lawyer trust account.
The hearing officer found that the arrangements violated current client conflicts rules and business transactions with client provisions. There was no harm, the lawyer had acted negligently and the misconduct was motivated by concern for the welfare of clients. He was "very remorseful" and held an erroneous belief that "what he and [the other lawyer] were doing was okay...To misquote an old saying: 'The road to trouble is paved with good intentions.' " (Mike Frisch)
Unwarranted Professional Courtesy
An attorney who had been appointed as trustee to conduct a sale of real property failed to distribute the proceeds in a timely manner. One of the parties retained counsel and directed the attorney to distribute the proceeds in care of his lawyer, indicating that a bar complaint would be filed if he failed to do so by a stated date. The lawyer/trustee responded by email, asking for "professional courtesy and indulgence until the end of the month" and advising that he was relocating his practice to Dubai. Despite further efforts and promises (and waiting until the end of the month), the funds were not distributed. The bar complaint was filed and the lawyer failed to participate in the hearing.
The Maryland Court of Appeals ordered disbarment, concluding that this result was appropriate in a default proceeding (as here) for violations involving intentional misappropriation. (Mike Frisch)
Convicted Justice DisbarredThe New York Appellate Division for the Third Judicial Department has accepted the resignation of a former state Supreme Court Justice and entered an order of disbarment. The former justice had been convicted of bribery and extortion in federal court. Details concerning the underlying criminal matter may be found in this report from the Village Voice. (Mike Frisch)
December 3, 2009
"I Have Personal Failings Like Everyone Else, And I Have Not Been True to My Values And the Behavior My Family Deserves"
Posted by Jeff Lipshaw
I am in Detroit for a family matter. I spoke to my wife from the car at about 7 a.m. She asked me if I would pick up and bring home some of her favorite pecan sticky buns from one of the local bakeries. For some reason, I got fixated on the idea of sticky buns in my carry-on, and said I didn't want to, getting quite heated about it in the process. I was a total jerk. I called home and two minutes later and apologized. I hope my sponsors will understand.
[This has been a test of the "15 Minutes of Fame Network". This is only a test. Had it been a real 15 minutes of fame event, you would have been instructed to turn to CNN, Fox News, MSNBC, or Pardon the Interruption for instructions on how to parlay personal failings or brazen chutzpah into hours of media entertainment. This has been a test of the "15 Minutes of Fame Network." We now return you to your regular blogging.]
UPDATE: What is it about guys? Another one bites the dust. Maybe I'm just such a nerd that I'm never faced with the temptation that seems to have lured Rick Pitino, David Letterman, Tiger Woods, John Edwards, Eliot Spitzer, Gary Hart, yadda, yadda, yadda. A fellow university professor once told me this story. He was teaching undergrads at a large urban university. He had given a failing grade on an exam to a female student. She approached him after a class, saying that if she failed the class, she would lose her financial aid, and that she would do "anything" to raise the grade. He said (with a leer), "anything?" She said, "Anything." He said: "Then why not try reading the material, coming to class, and studying?"
Two Law Profs (in Tax) Are Challenged As Expert Witnesses
Over at our sister blog TaxProf (well, a very big sister), Paul Caron reports this fairly unusual situation in which two established professors of tax law (Ethan Yale of Virginia and David Weisbach of Chicago) are being challenged by the government as "experts" in a tax matter. In one motion last month, the government actually put those sarky quotes around the word. We in the law prof world are not used to this...
Despite the quote marks, the main point of the government's position is less bomb-tossing: they cite the more mundane position that experts should not render purely legal opinions. "The Federal Rules of Evidence do not allow an expert to render opinion testimony about the law, because this Court already 'comes equipped with a ‘legal expert,’ called a judge.' Burkhart v. Washington Metro. Area Transit Auth., 112 F.3d 1207, 1213 (D.C. Cir. 1997)." The opponent responded that the testimony would not be "legal argument"; for example, Weisbach "is offering testimony regarding industry standards of care as it relates to the issuance of tax opinions and whether or not the tax opinions at issue in this case satisfied those standards."
A Family Matter
The Louisiana Supreme Court has disbarred an attorney for ethical violations in dealings with his former sister-in-law. His brother worked for Halliburton and had named his wife as the beneficiary of his life insurance. The brother gave his brother/lawyer power of attorney while overseas. The separation took its toll on the marriage and led to a divorce and property settlement that was completed in August 2000. In December 2000, the brother was killed in a traffic accident in Saudi Arabia, leaving his ex-wife as the beneficiary of over $800,000 in insurance.
The lawyer did not want the ex-wife to benefit and failed to share the information about the policy with her. She executed an agreement an agreement drafted by him signing away her rights for $25,000 without advising her to seek the advice of independant counsel. A hearing committee found the agreement "unconscionable, unfair, and unreasonable." The Disciplinary Board rejected the lawyer's claim that he was deprived of due process in the bar proceedings. the court here agreed that disbarment was appropriate:
Following his brother's death, respondent used his legal training to defraud [the ex-wife] of the life insurance proceeds to which she was entitled because he decided that she should not receive them...we will adopt the disciplinary board's recommendation of disbarment.
The court declined to follow the board's restitution recommendation: "...that issue is most appropriately resolved in the pending civil litigation." (Mike Frisch)
Paralegal Arranges Suspension Of Lawyer
Here's a rather remarkable disciplinary matter in which the Pennsylvania Supreme Court vacated an order of suspension based on the following findings.
The attorney was suspended for non-compliance with CLE obligations. Thereafter, charges of unauthorized practice were brought. The communications from disciplinary counsel were intercepted by the attorney's paralegal. The paralegal accepted service of the petition and consulted counsel without advising the attorney of the charges. Counsel contacted disciplinary counsel and arranged for a suspension by joint petition, accepting the paralegal's representation that the attorney did not want to meet to discuss the matter. Counsel signed the attorney's name to the joint petition without ever consulting with the attorney.
When the lawyer discovered the order of suspension, she retained counsel and sought vacatur. Counsel who had negotiated the joint petition filed an affidavit admitting he had never consulted with his "client." The above facts were established at a hearing on the motion to vacate.
There's obviously a backstory here. The recommendation attached to the court's order notes that the attorney, the paralegal and the lawyer who negotiated the suspension all have known each other for 15 years. This article from the online edition of the Bucks County Courier Times notes a suit filed against the lawyer based on allegations that the paralegal stole settlement proceeds. More here on the paralegal from Angiemedia.
UPDATE: The web page of the Pennsylvania bar disciplinary system discloses that the attorney was disbarred by consent on the same day that the above order was entered. (Mike Frisch)
Parents Entitled To Effective Assistance In Termination Of Parental Rights Matters
"Deciding an issue of first impression," the Maryland Court of Special Appeals has held that the parents in a termination of parental rights case are entitled to effective assistance of counsel. In the matter, the Office of the Public Defender was appointed to represent the parents who faced the loss of parental rights in guardianship and adoption proceedings. The attorney filed an untimely objection. The court struck the late objection and granted guardianship to the Department of Social Services.
The court held that the right to counsel in termination cases embraces a right to effective assistance. The late filing was ineffective representation. The matter was remanded to permit the objection to be considered on its merits. (Mike Frisch)
December 2, 2009
Tick Tock, Tick Tock
In a sharply worded 41-page opinion, an Arizona hearing officer rejected all disciplinary charges in a case brought over a decade after the (complex) events took place. The attorney was a member a law firm in which a partner had represented a close friend. The lawyer was retained by the partner as counsel when the partner was named personal representative of the friend's estate. During the probate administration, allegations arose that the attorney and partner had acted to benefit certain unsecured creditors (firm clients in unrelated matters) to the detriment of the estate. There were findings of improper conduct in the underlying litigation.
The State Bar investigated and dismissed in August 2001. Subsequently, there were additional findings of misconduct in the litigation. The State Bar then brought charges and sought to apply preclusive effect to the findings. The hearing officer denied such effect and found that the lawyer had given good-faith advice to the partner:
The Bar has not shown a single instance where Respondent failed, intentionally or unintentionally, to comply with any law on any occasion, let alone repeatedly...Rather the evidence supports the conclusion that he followed the probate code, as he understood it, and guided [his client]competently and in good faith down the highly technical path laid out for him in the probate code...If there is Arizona authority for the proposition that a lawyer can be found to have violated [rules prohibiting dishonesty and conduct prejudicial to the administration of justice] by giving correct legal advice to a client in good faith, the Hearing Officer has been unable to find it and it has not been cited by the Bar.
The most compelling aspect of the case (to me) brought back memories of one of my favorite childhood songs. One of the Bar's charges involved a grandfather clock. The deceased had fallen against the clock and died. The clock stopped at the moment of death. A dispute arose among the heirs whether to repair the clock or leave it stopped. The hearing officer found that the lawyer had no involvement in the dispute.
My grandfather's clock
Was too large for the shelf,
So it stood ninety years on the floor;
It was taller by half
Than the old man himself,
Though it weighed not a pennyweight more.
It was bought on the morn
Of the day that he was born,
And was always his treasure and pride;
But it stopped short
Never to go again,
When the old man died.
Here, the clock got repaired. (Mike Frisch)
Conditional Plea Leads To Disbarment
The Tennessee Supreme Court agreed that a hearing panel had acted within its authority and affirmed an order of disbarment. The attorney initially had defaulted on consolidated charges arising from four client complaints. At a subsequent hearing on sanction, he tendered a conditional plea in exchange for a three-year suspension. The panel approved the plea and granted the attorney's request to delay the effective date of the suspension on certain specified conditions. The attorney was warned that the panel would reconvene if he failed to certify compliance with the conditions. He failed to do so and the panel reconvened and imposed disbarment.
The court here rejected the contention that the panel was divested of jurisdiction when the Board of Professional Responsibility approved the proposed offer of conditional plea and had no power to modify the terms of the offer. Not so: "It was well within the jurisdiction of the Panel to both vacate the modified conditional plea when [the attorney] failed to timely notify his existing clients of his impending suspension by the established date, and enter an order of disbarment when [he] failed to appear at the [reconvened]hearing."
The court did hold that the attorney was allowed to nonsuit his petition for a writ of certiorari and reversed the trial court's contrary holding. As the appeal to the court was dismissed, the order of disbarment was affirmed. (Mike Frisch)
"An Overarching Breach"
From the web page of the Ohio Supreme Court:
The law license of [a] Willoughby attorney...has been suspended for 18 months, with the final six months of that term stayed on conditions, for mishandling a decedent’s estate and committing other misconduct by disregarding his duty to exercise independent professional judgment on behalf of clients who were facing foreclosure on their homes.
The Court adopted findings by the Board of Commissioners on Grievances & Discipline that [the attorney] neglected to secure trust assets that were part of the estate of a client for whom he had been named executor, resulting in improper distribution of assets from the estate by his co-trustee without the permission of the probate court.
The Court also found that [he] violated multiple provisions of the Rules of Professional Conduct by entering into a business arrangement with a purported “foreclosure rescue” service in which [he] received fees directly from the service to “represent” its customers in mortgage foreclosure actions without meeting with the clients, determining their individual objectives or financial situations or exercising independent judgment to determine what legal action was in each client’s best interest.
The court noted a prior case involving an attorney who partnered with a nonattorney entity to represent foreclosure clients and stated:
That association presented the same ills as have respondent's alliances--insufficent attorney-client communication and case preparation, nonattorney promotion of the lawyer's legal services, the aiding of the unauthorized practice of law, and the sharing of legal fees. Together, these failings signal the surrender of an attorney's ability to exercise independent professional judgment on a client's behalf and manifest an overarching breach of the lawyer's duty of loyalty to the client.
The court's opinion is linked here. (Mike Frisch)
Charges Allege Excess Zeal
The Illinois Administrator has filed a complaint alleging misconduct by an attorney appointed by a county public defender to (i) represent a juvenile charged with criminal sexual assault and (ii) represent the parents in a matter involving protective custody of their injured child. The public defender represented the child in the second matter.
The alleged conduct sounds in overzealousness. In the first, the complaint alleges:
...Respondent issued a subpoena to the Island Lake Police Department (hereinafter, "ILPD") in case number 07 JD 370, demanding that they produce any evidence of video and audio surveillance related to [his client] Bradley C. Shortly thereafter, Respondent received ILPD’s response to the subpoena indicating there was no video or audio surveillance related to Bradley C.
...Respondent went to the ILPD station...and approached the dispatch window. At that time, he told Kathy Vasquez (hereinafter, "Vasquez"), the dispatcher, that he was "with the State’s Attorney’s office" and asked her whether there was functional video or audio surveillance in the ILPD lobby. Respondent also asked about the events of May 12, 2007, when Bradley C. came to the ILPD. Vasquez told Respondent that there was no functioning video or audio surveillance in the ILPD lobby, and that he should address any questions about the Bradley C. matter to the assigned officer. Respondent then exited the ILPD.
Respondent’s representation to Vasquez that he was with the State’s Attorney’s office was false, and he knew it was false. Respondent’s statement to Vasquez that he was with the State’s Attorney’s office was intended to cause Vasquez to speak to him about matters relating to the Bradley C. case.
...Vasquez reported her conversation with Respondent to Officer John Nikopoulos (hereinafter, "Officer Nikopoulos"), who recorded the license plate number of Respondent’s vehicle as he departed the ILPD. Shortly thereafter, Officer Nikopoulos contacted the Lake County State’s Attorney’s office and determined that Respondent was an Assistant Public Defender and did not work for the State’s Attorney’s office.
In the second matter, he is alleged to have falsely represented himself as an assistant state's attorney to a child protective investigator and also to have engaged in what the complaint calls "unauthorized copying." The appointed attorneys in abuse and neglect cases share space and staff with the public defenders. One of the public defenders representing the juvenile inadvertantly left original medical records of the client on a copy machine. The accused attorney found them there and copied them without permission. According to the complaint:
[Public defender] Gordon went to Respondent’s office and asked him why he had copied the medical records without authorization, and Respondent sarcastically responded to Gordon "shame on me." Respondent also told Gordon at that time to "go ahead and report me to the Attorney Registration and Disciplinary Commission."
[The next day] Respondent [editor's note: I assume this reference should be to Gordon] informed Gossman [the chief public defender] about Respondent’s copying of the medical records that [public defender] Hayward inadvertently left on the copier in relation to case number 09 JA 41, and about her conversation with Respondent...
...Gossman met with Respondent to discuss his copying of the medical records. At that time, Respondent acknowledged copying the documents from the copier and said that he would repeat the conduct if he found documents on the copier in future. Gossman then demoted Respondent (removing him as a supervisor), suspended him for a week without pay, placed him on probation for six months, transferred him to the felony division in Waukegan, and instructed him not to have further involvement with case number 09 JA 41.
Shortly thereafter, Respondent went to the Lake County Public Defender’s Juvenile Division office in Vernon Hills, obtained the Public Defender’s file from case number 09 JA 41, and removed documents from the file, including copies of motions that he had filed in the matter.
...after Gossman learned that Respondent had gone to the Juvenile Division, pulled the file from case number 09 JA 41, and removed documents from that file, she terminated Respondent’s employment with the Lake County Public Defender’s office.
The complaint charges that this conduct violated Rules 8.4(a)(4) and (5) and "tend[ed] to defeat the administration of justice or to bring the courts or the legal profession into disrepute..." (Mike Frisch)
The Silverdome and the Fixed Cost Dilemma
Posted by Jeff Lipshaw
Mark Edwards (William Mitchell, left), a guest blogger at Concurring Opinions, has an interesting post on the recent fire sale disposition of the Silverdome, the former home of the Detroit Lions, primarily on the subject of bargaining power between landlords and tenants, and the importation of contract law principles into residential and commercial leasing. Mark commented on the "Michigan" aspect of the Silverdome's decline, and I felt a personal tug, because I'm a Michigander born and bred, still own a home there, and I started kindergarten at the Herrington School about a mile from the Silverdome, in a little neighborhood just across Featherstone Road from what many years later would become the site of the Silverdome. I wrote a comment over there I'm re-posting in large part here, because there is, it turns out, something kind of Michigan about the problem.
Mark suggests that the Silverdome problem has to do with the commercial power of the tenant, but I see it somewhat differently. It strikes me that it arises because of the non-fungible and substantial fixed nature of the asset (which indeed was dictated by the tenant at the outset). You could have a very powerful tenant in an attractive office building in mid-town Manhattan, able to dictate terms versus the owner, and not have the Silverdome problem. You could also have a smaller building and not have the Silverdome problem (I see a lot of restaurants that clearly used to be A&W Root Beer Drive-Ins.)
If there is something particularly “Michigan” about the Silverdome problem, it’s the problem of dealing with the redeployment of large fixed assets when the forces of creative destruction take down an industry. As a former executive in the chemical industry, I can attest to the dilemma of the rational impulse to continue to operate fixed assets, even when they are not returning their total costs, because, in the short term, there is a marginal return on the marginal cost. It’s Microeconomics 101 – you operate at a loss on total costs until you reach the shutdown point of no marginal profit. If it were just one chemical plant sitting somewhere that has been made non-competitive (somewhere after not returning total costs and extending to shutdown), it would be unsightly, and the owners would have taken the loss, but it wouldn’t be a crisis. It’s a crisis in Michigan because it’s happened to an entire industry at the same time.
It’s also not the first time it’s happened to an industry in Michigan. Take a drive some time around the Keweenaw Peninsula, the part of the U.P. that juts into Lake Superior. Calumet, Michigan and the surrounding township used to have 25,000 people there, mining copper. I think about a thousand live there now. Copper Harbor, at the very tip of the peninsula, still has street grids laid out.
Nor is it unique to Michigan – see steel towns in Pennsylvania, mills and factories in Massachusetts. But I’m not sure anything has ever compared to the auto industry in terms of the dependence of whole regions and nations. During the Chrysler bailouts of the 1980s, I remember hearing George Will, supporting the idea, say that something like one-sixth of the U.S. GDP was related to the auto industry.
December 1, 2009
Hooray for Us! We're Number, Um, In the Top 100!
Posted by Jeff Lipshaw
Over at Legal Ethics Forum, my friend and colleague, Andy Perlman, has implicitly acknowledged us as the standard against which LEF must necessarily measure itself. Rivals? Us? Oh, yes, I suppose in a manner of speaking. When we think about them at all. And no link? So petty.
Excessive Fees Result In Probation
More from the California Bar Journal:
[An attorney] was suspended for two years, stayed, placed on two years of probation and was ordered to take the MPRE within one year. The order took effect May 9, 2009.
While one of two partners at [his law firm] in San Diego, [he] represented two trusts worth more than $16 million that held the assets of James Hervey Johnson, a noted atheist who died in 1988. Both [he and his partner] provided legal advice and represented the trusts and trustees from 1997 to 2000, collecting more than $2.9 million in fees. [He] did more work than his partner on the account.
In 2000, the California Attorney General charged both lawyers with collecting excessive fees. The trustees were charged with mismanaging the trusts.
In a 2004 settlement, [the attorney] agreed to refund $330,000 of the $480,000 [the firm] had collected in unearned fees. He ultimately completed the restitution.
He stipulated that he failed to promptly refund unearned fees.
In mitigation, [the attorney] had no prior discipline record, he cooperated with the bar’s investigation and he took steps to address the harm suffered by his clients.
Change Coming To California
From the web page of the California Bar Journal:
After nine years of work by its Rules Revision Commission, the State Bar Board of Governors has approved 35 revisions of the California Rules of Professional Conduct on issues ranging from lawyers as third-party neutrals and fees to communication with a represented person and competence.
“Approving the first batch of new Rules of Professional Conduct is an important step towards finalizing the process,” said Michael Marcus, chair of the Discipline Oversight Committee. “All California lawyers owe a debt of gratitude to the Rules Revision Commission for its years of hard work.”
For easier reference, the numbering of all the new rules are being changed to conform to the numbering system and subject area of the ABA Model Rules of Professional Conduct.
At its November meeting, the Board of Governors approved rule revisions that:
- Require an attorney serving as a third-party neutral to explain the difference between an advocate and third-party neutral to someone unlikely to be aware of the distinction. (Rule 2.4)
- Retain California’s current standard prohibiting, for disciplinary purposes, an “unconscionable fee.” The commission had been considering adopting the ABA’s standard that prohibits an “unreasonable fee.” (Rule 1.5)
- Follow the ABA Model Rule that expands ex parte communication to include all represented “persons.” The current rule applies only to a represented “party.” (Rule 4.2)
- State that a lawyer shall not intentionally, recklessly or repeatedly fail to perform legal services with competence. The rule defines “competence” in any legal service as applying the diligence, learning, skill and mental, emotional and physical ability reasonably necessary for the performance of such service. (Rule 1.1)
Proposed rules dealing with sex with a client and conflicts of interest were referred back to the commission for further work. Proposed rules on reporting the egregious behavior of another attorney and business transactions and adverse interests were tabled until the January meeting for further discussion.
Caperton V. Massey: The Last Word?
Justice Workman has filed her dissent:
Neither the sheer length of the majority's opinion, nor the large number of cases cited (but erroneously applied), nor even its expansive conclusory statements, can obfuscate its lack of sound legal reasoning and its result-driven approach.
In enunciating eight major new points of law and applying them retroactively (with no opportunity for the parties to make a record under the new law), scrapping mountains of prior precedent that give deference to the finders of fact below (and instead making new factual determinations at this level), rewarding the defendant (whose conduct is seemingly recognized by all as reprehensible) the spoils of its fraudulent acts, and then characterizing the result as “equitable,” the majority has turned West Virginia jurisprudence on its ear.Specifically, the majority holds that Massey, despite engaging in wide-ranging fraudulent conduct, both in connection with the 1997 Coal Supply Agreement (“the CSA”), as well as separate and apart from it, is entitled to benefit from the forum-selection clause not
only with regard to matters relating to the CSA, but even with respect to actions completely unconnected to that contract. The majority reaches this conclusion despite the fact that the forum-selection clause is contained in a contract to which Massey was not a party, with which Massey tortiously interfered, and under which Massey never acted in good faith. In so doing, the majority not only deprives the plaintiffs of the substantial damages awarded to them by the rightful finders of fact, a Boone County jury, but also leaves them with no legal recourse by which to address Massey's extensive pattern of fraudulent conduct. It similarly eliminates any recovery for the plaintiffs' numerous creditors in the three pending bankruptcy cases, to whom most of the judgment would have gone. Not least among those creditors are the Harman Companies' union miners who lost their jobs as a result of Massey's fraudulent conduct, and the Harman Companies' hundreds of retirees, to whom the Harman Companies previously paid pensions and medical benefits.
Because the majority unjustly strips Massey's victims of their rightful verdict by creating extensive new law and manipulating the existing law to achieve the end result, I dissent on the following grounds...
In sum, because Massey engaged in a wide-ranging fraudulent scheme to destroy the Harman Companies and Mr. Caperton for its own financial gain, and because many of the acts engaged in by Massey to further that scheme bore absolutely no relation to the CSA, legal claims based on those acts should not be controlled by the forum-selection clause. Furthermore, under Farmland and Armco, even claims that partially relate to the fraudulent declaration of force majeure should be exempt from the forum-selection clause, because, given the wide-ranging scope of Massey's conduct in furtherance of that scheme, the “gist” of the plaintiffs' suit exceeds the scope of the CSA. For these reasons, the forum- selection clause should not be enforced in this case.
Furthermore, the majority's new standard of review is inappropriate, given that its new test for determining the enforceability of forum-selection clauses requires findings of fact. Where a circuit is asked to make factual determinations, this Court should afford those determinations the deference traditionally given. Incredibly, the majority not only fails to give deference, but chooses to make those findings of fact itself by applying its new forum-selection clause test in this case and, in doing so, it deprives the plaintiffs of their due process right to present evidence to establish that the forum-selection clause should not be enforced.
Thus, I oppose the majority's decision to retroactively apply the new principles of law relating to forum-selection clauses, a decision that deprives the plaintiffs and other victims of Massey's conduct of any possible redress. Indeed, even under the majority's newly stated retroactivity test, retroactive application is inappropriate in the instant case because the majority's new principles of law were not “clearly foreshadowed,” and applying them to this case produces a “substantial inequitable result.” For these reasons, I respectfully dissent.