February 14, 2009
The New Villain: The Big, Bad Bank
The movie reminder below was sent to us by occasional guest-poster Kelly Lynn Anders, an associate dean at Washburn, whose blurb conjures an image of smoking jacket, pipe, and really bad seduction I had forgotten. Meanwhile, I saw "Taken" last night and let me just say there is no pretense of moral ambiguity or consequences there in the effort to resist evil-doers, making the film more like one directed by John Yoo than by John Woo -- though in fact this is a Luc Besson/Pierre Morel deal. --Alan
“The International” was released yesterday, and it features an “evil” bank as the key villain. According to IMDB, the film was inspired by the BCCI (Bank of Credit & Commerce International) banking scandal, which took place throughout the ’80s and into the early ’90s. The screenplay was written by Eric Singer, who has a cameo as a cashier in the film. Naomi Watts plays Eleanor Whitman, a Manhattan District Attorney who collaborates with Interpol to “bring to justice one of the world's most powerful banks.” Initially, I had this title confused with “The Continental,” Christopher Walken’s hilarious departure on SNL a few years ago about a hapless lounge lizard, but early reviews indicate that this film might be less entertaining. The NPR review is available at this link.
February 13, 2009
"Not Conducting A Baby-Sitting Service"
An attorney who had practiced in the area of commercial litigation with Winston & Strawn and Skadden Arps decided to return to his native South Dakota. He took and passed the South Dakota bar exam and was associated with a firm. The lawyer worked with a series of law firms and then became president and chief executive office of a corporation. He worked hard--in the office from 7 am to 7 pm, went home to attend to his children until bedtime, and back to the office until 2 am. Overextended, he neglected a client matter, failing to file suit before the statute of limitations ran. He reached an private agreement approved by the Disciplinary Board that allowed him to continue to practice. After a second lapse, he entered into a second private agreement that prohibited further practice other than with the corporation. He violated that agreement by accepting (and neglecting) a case. When disciplinary charges were filed, he filed untimely responses and offered excuses found to be "disingenuous at best."
Based on the course of conduct, the South Dakota Supreme Court declined to disbar but ordered a three-year suspension: "the Disciplinary Board is not conducting a baby-sitting service for wayward attorneys who have lost their way." The court noted his pro bono activities and service as church president.
The private agreement process (which seems similar to what in D.C. would be called a "diversion" agreement) defers the disposition of a bar complaint with conditions but a concession of misconduct. The complaint is dismissed when the conditions are satisfied. This case describes a series of failures to either honor or follow through with the agreed-upon conditions on the part of the lawyer. At one point, the attorney offered evidence that he was doing well and had performed in a production of "Oklahoma." Ultimately, he was never able to manage his workload to avoid the recurring neglect and procrastination. (Mike Frisch)
An Arkansas attorney was cautioned for noting but not pursuing an appeal on behalf of his clients and failing to respond to discovery requests. The appeal was found to have been for no purpose except delay and to have imposed a burden on the opposing party. The failure to respond to discovery involved disobedience of legal obligations. (Mike Frisch)
Misconduct Merits More Than Censure
An attorney who has practiced for 34 years was suspended for a minimum of three months by the Iowa Supreme Court. The attorney had neglected a personal injury matter, prematurely taken a fee in a probate matter, and made misrepresentations in connection with the probate matter. He had generally denied misconduct but failed to file an answer to the disciplinary complaint. The court rejected the lawyer's request for a public censure rather than suspension. Reinstatement is conditioned on a showing that he has not engaged in unauthorized practice during the period of suspension. (Mike Frisch)
The Oklahoma Supreme Court denied the reinstatement petition of an attorney who had been suspended for two years as a result of his participation in a fraudulent real estate transaction. The injured clients, among others, had testified in opposition to the petition. The court concluded:
We agree with the trial panel that there is no evidence to indicate that the attorney engaged in the unauthorized practice of law during his suspension. However, although there is testimony in support of Pacenza, the transcript of proceedings before the trial panel makes it clear that the attorney has not demonstrated true remorse for the damage he caused and that he continues to fail to recognize that his clients have not been made whole financially. In addition, we are presented with testimony from the clients harmed by the attorney's actions leading to discipline, by the practicing bar, and by one judicial officer questioning his legal abilities and his integrity. Finally, we are faced with evidence that Pacenza did not strictly comply with the rules governing either his suspension or his reinstatement.
In making a reinstatement decision, this Court must disregard feelings of sympathy, recognizing that the petitioner's burden of proof is a heavy one. While we are concerned with any adverse effect reinstatement might have on the practicing bar, our foremost consideration is always to protect the public welfare. After having given due consideration to the evidence contained in this record and the appropriate factors examined in reinstatement proceedings, we determine that the petitioner has failed to carry his burden to show by clear and convincing evidence that he is entitled to reinstatement. Therefore, reinstatement is denied and costs of $$2,714.63 are imposed.
February 12, 2009
Treble Damages For Lawyer Fraud
In answering two questions certified by the United States Court of Appeals for the Second Circuit, the New York Court of Appeals held that a lawyer who had filed a suit that accused the opposing parties of fraudulently purchasing a partnership could be liable for three times costs of defending the suit under New York Judiciary Law section 487, which provides for treble damages when a lawyer is guilty of deceit or collusion. The opposing parties sued the lawyer in federal court and the lawyer had appealed the damage award, contending that he could not be liable under a common law fraud theory because "the trial judge was...never fooled by misrepresentations [made by the lawyer]."
The court here concluded that the section at issue did not describe common law fraud; rather, the New York statute has it origins the the first Statute of Westminster, adopted in 1275: "a unique statute of ancient origin in the criminal law of England. The operative language at issue -- 'guilty of any deceit'--focuses on the attorney's intent to deceive, not the deceit's success."
As "the lawsuit [filed by the attorney] could not have gone forward in the absence of the material misrepresentation, that party's legal expenses in defending the lawsuit may be treated as the proximate cause of the misrepresentation." (Mike Frisch)
It's A Right
The Wyoming Supreme Court remanded a criminal case for resentencing based on concerns that the judge had penalized the defendant for exercising his right to a jury trial. The basis of the concern was the following statement:
I know that generally speaking when I arrive at a sentence for someone [who has] pled guilty, I take into account the acceptance of responsibility. I take into account the saving of the effort that the guilty plea represents to the state. I take into account the saving of anxiety of witnesses who would otherwise be expected to testify if a defendant does not plead guilty. I take those things into account when I arrive at a sentence for someone who pleads guilty.
I think the corollary to that benefit to someone who pleads guilty is someone who does not plead guilty, someone who does not accept responsibility, somebody who one disregards the impact of stepping up into this witness stand and appearing in a courtroom [full] of strangers, appearing in a courtroom in front of somebody the jury determined had victimized that child. I think it’s appropriate for me to take all of those things into consideration.
The resentencing will be conducted by another judge. (Mike Frisch)
A Family Matter
The Minnesota Supreme Court ordered the disbarment of an attorney who had engaged in a pattern of misrepresentations, misappropriation, conflicts of interest and the creation of false documents. The court termed the case "unusual" as it had previously ordered the disbarment of the attorney's spouse, who also had engaged in some of the misconduct at issue here. The court noted that the referee had concerns about the attorney's mental health but found that no evidence had been presented in that regard that would mitigate the sanction. (Mike Frisch)
Breach Of Confidentiality Charged
The Illinois ARDC has filed charges alleging that an attorney had misused confidential information learned during the course of representating a client. The lawyer and client allegedly were involved in an intimate relationship. The lawyer represented the client in claims of harassment brought against another person. The lawyer reviewed emails from the opposing party, who contended that there was no harassment but rather an intimate relationship with the client. Neither the lawyer or the opposing party was the spouse of the client.
The charges allege:
When Tipton [the opposing party] produced the various e-mails and documents, Respondent asked if she could see the documents. Judge Senechalle told Tipton to give the documents to Respondent and then he called for a recess in the proceedings so the parties could review the evidence.
After Judge Senechalle called for a recess, Respondent told Brennock [the client] to sit down and wait in the courtroom and she asked Tipton to follow her out into the hallway. Brennock followed Respondent and Tipton out into the hallway and down the stairs. Respondent sat down with Tipton and reviewed the documents. During this time, Brennock repeatedly asked Respondent to give him the documents. At no time did Respondent give Brennock the documents or reply to his request that she give him the documents.
While she was reviewing the documents...Brennock informed Respondent that she was discharged as his attorney. Brennock again asked for Respondent to give him the documents. At no time did Respondent give Brennock the documents or reply to his request that she give him the documents.
After reviewing the documents described in Paragraph Five, above, Respondent told Brennock he was "dead" and proceeded back to Judge Senechalle’s courtroom with the documents in her hand.
When case no. 07 OP 40501 was called, Respondent made a motion to withdraw from representing Brennock. Respondent’s motion was granted.
On or about November 30, 2007, in the afternoon, after the court proceedings in case no. 07 OP 40501 were concluded, Respondent called Brennock’s wife, Sally Brennock ("Sally"). At that time, Respondent spoke with Sally and told her about Respondent’s relationship with Brennock, that Respondent had represented Brennock that day in an order of protection matter and that during the course of the proceedings, Respondent learned that Brennock had also been involved in an intimate relationship with a woman named Chablis Tipton, and that Respondent had seen various e-mails and documents which proved that Brennock and Tipton were involved in an intimate relationship.
On or about November 30, 2007, in the evening, Respondent went to a restaurant in Oak Park, IL which she knew was frequented by Sally. At that time, Respondent found Sally in the restaurant. Respondent spoke with Sally again about the information she had seen from Tipton during the court proceedings earlier that day and about Brennock’s relationships with other women.
At no time did Brennock authorize Respondent to disclose any information related to his order of protection matter to Sally or any other individual.
On or about December 17, 2007, Sally filed a Petition for Dissolution of Marriage against Brennock. The matter was entitled, In re the Marriage of Sally S. Brennock and Matthew S. Brennock, case no. 07 D 12419, in the Circuit Court of Cook County.
Suspension For Defrauding Client
The web page of the Ohio Supreme Court reports:
The law license of Waverly attorney Sherry D. Davis has been suspended by the Supreme Court of Ohio for two years, with the second year of that term stayed on conditions. The Court adopted findings by the Board of Commissioners on Grievances & Discipline that Davis failed to notify a client’s insurer that she had accepted a settlement from another insurance company on his behalf, causing the client’s own insurer to deny his claim for underinsured motorist coverage to which he was otherwise entitled. Davis then engaged in a multi-year course of false and misleading communications to her client misrepresenting the status of his denied claim, including the fabrication of fraudulent documents, in an effort to prevent the client from discovering the harm she had caused him.
The Court found that Davis’ actions violated, among others, the state attorney discipline rules that prohibit conduct involving fraud, deceit, dishonesty or misrepresentation; conduct that adversely reflects on the attorney’s fitness to practice law; failure to seek a client’s legal objectives and intentionally causing damage or prejudice to a client.
The court's opinion is linked here. (Mike Frisch)
February 11, 2009
Fines on Teaching Empathy as a Lawyering Skill in Ethics Classes
Posted by Alan Childress
Barbara Glesner Fines (UMKC) has posted to SSRN her article, Teaching Empathy Through Simulation Exercises - A Guide and Sample Problem Set. Her abstract is:
For over a decade, legal educators (particularly clinical faculty) have argued for the importance of teaching empathy as a critical component of legal education. Both the Carnegie Report and the Best Practices study have emphasized that legal education's instruction in skills - including lawyer-client relationship skills - requires greater attention. While some might argue that empathy is a skill that cannot be taught outside the context of clinical representation of clients, this simulation problem proceeds from the assumption that empathetic understanding of the client's situation is a skill that can be addressed in a variety of settings. Indeed, if empathy is left unaddressed in the classroom, legal education may further the divide of mind and heart and leave students with a message that what they learn in the classroom is an intellectual exercise of little real relevance to what they will do as an attorney.
Professional responsibility courses are an especially appropriate classroom in which to address empathetic understanding of the client, as a key component in exploring the attorney-client relationship and the attorney's duty of communication. This role play is designed in the context of a bar admission problem. While the problem can be used to explore the substantive standards for admission to practice or the impact of law regarding disabilities on that process, the primary goal of this exercise is to explore how it feels to be a client. By placing the students in the role of a law student bar applicant - a situation that nearly every law student can imagine - the role play makes it easier for students to internalize the feelings and perspectives of the client.
The role play includes instructions for attorney and client, documentary evidence, and a research memorandum on applicable law. Also included is an edited version of the actual case which is a basis for the problem.
Fines, shown right, also blogs at Family Law Prof Blog, including this recent post warning family law practitioners to be careful what they promise in a retainer agreement, given that a court may allow suit for breach of contract apart from legal malpractice (see also Mike's post here).
February 11, 2009 in Abstracts Highlights - Academic Articles on the Legal Profession | Permalink | Comments (2) | TrackBack
Stipulated Sanction Questioned
In a bar discipline case involving allegations of improper closing argument by defense counsel, the Arizona Disciplinary Commission imposed the agreed-upon discipline of censure, one year of probation and three hours of CLE in the area of criminal law. Four commissioners opposed the sanction as overly harsh:
in sanctioning the [attorney] for the conduct in this matter this commissioner is concerned that we are piece-mealing a litigant's words during what could only be considered the most contentious type of litigation, trial for first degree murder, for what we are assuming is unethical, as conceded by [the attorney], though was arguably justified argument by a properly zealous attorney representing her client.
The alleged offending comments were, the dissent notes, "an isolated incident in...a noteworthy career" and the Bar should have offered diversion.
An attorney charged with ethical violations may feel a great deal of pressure to accept a stipulated, non-suspensory sanction. We posted another Arizona decision yesterday where no misconduct was found, but only after a hearing officer and the commission had heard and rejected all charges. It takes courage (and costs money and emotional energy) to fight rather than stipulate to charges of misconduct even if you believe that you will be vindicated in the end. (Mike Frisch)
No Accounting, No Violation
The Louisiana Attorney Disciplinary Board, with two attorney and one lay member dissenting, concluded that an attorney had not violated any ethics rules in the representation of a client on cocaine charges. The board majority held attorney did not violate rules governing fees in charging a flat fee of $1,000 per count for a total $2,000 fee. The fee was found to be reasonable, although not reduced to writing the question of whether there was a previous professional relationship was "unanswered," the fee was earned on receipt and did not need to be placed in a trust account, and there was no obligation to provide an accounting because the client's father (not the client) had asked for it.
The dissenters believe that the father, who had paid the fee, was entitled to an accounting and that the lawyer should be suspended for 90 days. Further, the disputed (and arguably unearned) fees should have been placed in a trust account: "The fact that the fee was determined to be reasonable and that none of the fee should be returned to [the client's father] does not negate this violation. Respondent had an obligation to provide the accounting and suggest a means to resolve the fee dispute, regardless of his belief that the fee was reasonable and earned. If such a requirement is not enforced, attorneys could simply mandate that their fees are reasonable, never provide accountings, never place disputed funds in trust and never facilitate, through arbitration or other means, the settlement of fee issues." (Mike Frisch)
February 10, 2009
New Enron Corporate Fiasco Reader Available
Posted by Jeff Lipshaw
The Foundation Press compilation, Enron and Other Corporate Fiascos: The Corporate Scandal Reader, 2d Edition , edited by Nancy Rapoport (UNLV), Jeffrey Van Niel, and Bala Dharan (Rice) is now in print. I'm pleased to say that Suffolk is well represented: Andy Perlman (of Legal Ethics Forum fame) and I both have pieces in it. Andy's contribution is his Hofstra Law Review article, Unethical Obedience by Subordinate Attorneys: Lessons from Social Psychology. The editors were kind enough, or confused enough, to include two of my articles, the U. Toledo Law Review piece, Law as Rationalization: Getting Beyond Reason to Business Ethics, and the Wayne Law Review piece, Sarbanes-Oxley, Jurisprudence, Game Theory, Insurance and Kant: Toward a Moral Theory of Good Governance. Brad Wendel (Cornell) also of LEF fame contributed Professionalism as Interpretation, originally in the Northwestern University Law Review.
Other contributors are John Coffee (Columbia), Cynthia Cooper (Cooper Consulting), Lynne Dallas (San Diego), Jose Gabilondo (Florida International), Malcolm Gladwell, Kent Greenfield (BC), Kristen Hays (Houston Chronicle), Katherine Kruse (UNLV), George Kuney (Tennessee), Donald Langevoort (Georgetown), David Luban (Georgetown), Jonathan Macey (Yale), Peter Margulies (Roger Williams), Colin Marks (St. Mary's), Geraldine Szott Moohr (Houston), Marleen O'Connor (Stetson), Frank Partnoy (San Diego), Robert Prentice (Texas), Robert Romano (Yale), Mark Sargent (Villanova), Steven Schwarcz (Duke), David Arthur Skeel (Penn), Christopher Whelan (Oxford, Visiting, Washington & Lee), Duane Windsor (Rice), and Randall Wray (UMKC).
Liens Not Unethical
The Arizona Disciplinary Commission has, in my view correctly, affirmed the proposed dismissal of ethics charges against an attorney who had accepted liens to secure the payment of fees in divorce cases. The commission found that the liens were authorized by the Arizona disciplinary rules and were not prohibited business transactions with a client. The state legislature expressly has permitted lawyers to take a security interest in community property. The ABA "reached the same conclusion and it is a long standing tradition in Arizona that unless an ABA opinion is expressly overruled, it is considered persuasive in Arizona."
The commission held that it lacks authority to order the State Bar to pay the attorney's fees of the accused lawyer notwithstanding the assertion that it "has relentlessly pursued this matter and engaged in selective prosecution as Respondent's partner/husband was not similarly charged in this matter."
I previously had expressed my view that the State Bar should not have appealed the proposed dismissal. I received the briefs of the accused lawyer to the commission (thanks to her for reading the blog and providing the information). I fully agree that dismissal is the appropriate result. (Mike Frisch)
A Question Of Material Fact Precludes Summary Judgment
The Delaware Supreme Court reversed an order granting summary judgment to a law firm in a professional malpractice action on statute of limitation grounds, concluding that there was a question of fact as to when the client was on inquiry notice of the alleged malpractice. The client owned two apartment complexes and had decided not to sell when an attorney [not the malpractice defendants] advised that he would suffer double taxation on the sale. The new attorney told the client that the problem could be avoided by electing Subchapter S status and holding the property for another 10 years. The client then sued his original lawyers for failure to elect Subchapter S status.
The court here held that, although the client was aware of the double taxation problem in 1999, "one could conclude that [the client] had no reason to question the manner in which [the lawyer defendant] accomplished the restructuring until [the client] received an offer to buy...in 2004, and learned the tax consequences of such a sale." Thus, there was a basis in the record to find that the 2005 lawsuit was filed within the applicable statute of limitations. (Mike Frisch)
Bar Prosecutor Disciplined
The South Carolina Supreme Court ordered a two-year suspension of an attorney employed as a disciplinary counsel who had been charged with solicitation and impersonating a law enforcement officer:
On or about November 2, 2006, respondent was arrested in Richland County for the crime of soliciting prostitution in violation of S.C. Code Ann. § 16-15-90 and § 16-15-100 (2003). The warrant alleged respondent met with an undercover South Carolina Law Enforcement Division (SLED) agent posing as a prostitute and solicited the undercover agent for sex.
As a result of the same occurrences, respondent was also arrested on November 2, 2006 in Richland County for impersonating a law enforcement agent in violation of S.C. Code Ann. § 16-17-720 (2003). The warrant alleged that, during the encounter with the undercover SLED agent who was posing as a prostitute, respondent verbally identified himself as a SLED agent by presenting a badge and stating he was a SLED agent. At the time of the arrests, respondent was employed on a full-time basis as an attorney with the Office of Disciplinary Counsel and the badge he presented to the undercover SLED agent was his Disciplinary Counsel badge.
Respondent admits that, during his conversation with the undercover SLED agent, he made statements that she reasonably understood to be soliciting prostitution, even though he did not offer money but, instead, used words that reasonably represented an arrangement had been made by respondent’s friend in the escort service business which would allow for sexual activity without payment. Respondent also acknowledges that, during the encounter with the undercover SLED agent, he stated he had overheard information regarding investigations into prostitution activity while he was at SLED and stated that he might be able to provide information regarding future prostitution investigations. Respondent admits that the statements concerning his ability to inform about future prostitution investigations were false; the Special Prosecutor has no evidence to establish otherwise. Respondent further admits that, during the exchange with the undercover SLED agent, he identified himself as a “SLED agent” and, upon her inquiry as to what “SLED” meant, he responded “State Law Enforcement Division” or words to that effect.
The responsibility for prosecuting respondent for these crimes was transferred to the Solicitor’s Office of the Sixth Judicial Circuit. Respondent was allowed to enter the Pre-Trial Intervention Program and he completed that program on or about September 8, 2008.
The court declined to impose the sanction retroactive to the attorney's interim suspension in light of what the court characterized as the serious nature of the misconduct. (Mike Frisch)
A Serious Problem
An attorney who had been arrested for cocaine possession was suspended for nine months by the South Carolina Supreme court. The attorney acknowledged an ongoing problem with substance abuse:
On or about December 8, 2007, the Mount Pleasant Police Department arrested respondent for possession of a cocaine substance. Respondent admits that he in fact had possession of the cocaine in his vehicle at the time of his arrest. Respondent admits he has a substance abuse problem and, further, that substance abuse is a serious problem which impacts all aspects of his life, including his fitness to practice law.
Respondent represents he has undergone and completed in-patient counseling for substance abuse and has signed a contract with Lawyers Helping Lawyers for continuing assistance in dealing with his substance abuse. Respondent represents he completed Pretrial Intervention and the charges arising out of his December 8, 2007 arrest have been dismissed.
The sanction was based on an agreed disposition. (Mike Frisch)
February 9, 2009
And The Winner Is Not...
A recent opinion from the Massachusetts Committee on Judicial Ethics deals with the propriety of a judge receiving an award or other recognition from an organization that has members who may appear before the judge:
Public confidence in a justice system's true impartiality depends at least as much on the appearance of impartiality as it does on the reality. But the appearance of impartiality can be degraded by the cumulative impact of many small incursions just as surely as it can be by a few instances of major dereliction. Accordingly, the Code of Judicial Conduct was designed to operate in a strongly prophylactic manner to prevent the subtle erosion of public confidence that, if unchecked, inevitably undermines confidence to the point of collapse. The code's prophylactic requirements do not prohibit judges from accepting all awards and they do not keep judges from appearing at all award ceremonies. But, as presently written, the code's requirements do prohibit judges from accepting awards from individuals and firms who are likely to appear in the courts where they sit and the code's requirements do prohibit judges from accepting awards at events those firms and individuals publicly sponsor.
Rights Of Grand Jury Target
The New Mexico Supreme Court has held that a grand jury target is entitled to a procedural remedy when the prosecuting attorney declines to present potentially exculpatory evidence to the grand jury that is considering an indictment:
In light of the Legislature’s clear intent to provide the grand jury with more information from the target of a grand jury investigation, and in light of the judiciary’s responsibility to ensure the equitable and efficient operation of the grand jury system, we conclude that the grand jury judge has a role to play when the prosecutor does not want to alert the grand jury to the existence of the target-offered evidence. To allow the prosecutor’s screening function to proceed unchecked pre-indictment invites post-indictment inefficiencies into the system. And to assume that all damage flowing from an unjustified indictment can be cured post-indictment is to ignore the lasting injury that even an unsuccessful indictment can inflict.
We therefore remand this matter to the district court to resolve the outstanding disputes between the parties regarding the extent to which the grand jury should be alerted to evidence offered by Petitioner. Because Petitioner has apparently submitted a redrafted letter to the district attorney requesting that the grand jury be alerted to specific evidence, the district attorney should file a motion with the grand jury judge if the district attorney believes that any of the target-offered evidence is inappropriate for submission to the grand jury. The grand jury judge shall then proceed to rule on the motion in a manner consistent with this opinion. Although we endeavor in this opinion to provide the grand jury judge with a workable framework for resolving the disputes in this case, we also request that our Rules of Criminal Procedure for the District Courts Committee consider whether rule amendments are needed based upon the procedure we have outlined here today.