Friday, May 1, 2015
Claims by the heirs to the Johnson & Johnson fortune against Proskauer Rose LLP on allegations of fraud, excessive legal fees and unjust enrichment may go forward, according to a decision yesterday by the New York Appellate Division for the First Judicial Department.
The court affirmed dismissal of the legal malpractice claim.
The law firm had initiated discussions of the possible sale of long-held J & J stock. The plaintiffs agreed to consider the law firm's proposal.
The issue involved a complex series of steps recommended "to effectuate the tax [avoidance] strategy."
Between October 13, 2000 and November 30, 2000, plaintiffs took the complex series of steps recommended by TDG [a business that developed tax avoidance strategies] and Proskauer to effectuate the tax strategy. They paid TDG a total of $1,379,650 in fees and costs, of which they allege that $425,000 was paid by TDG to Proskauer to cover its legal fee.
In June 2001, Proskauer sent plaintiffs a 63-page opinion letter, dated December 29, 2000, which concluded that "it was more likely than not" that the scheme, already executed, would not generate any gain or loss, or accrue any penalties if it was disallowed by the IRS.
In January 2002, the IRS announced a tax amnesty program which allegedly would have been applicable to plaintiffs' situation. However, Proskauer did not notify plaintiffs of that program. In April 2006, the IRS sent plaintiffs a letter requesting documents and detailed information about the tax avoidance strategy they had implemented over five years earlier. Plaintiffs sought counsel from Waxenberg, but he informed them that Proskauer was conflicted by its representation of TDG. Concerned that the agency would ultimately challenge the scheme and assess penalties against them, plaintiffs secured a tolling agreement from Proskauer which, after a later extension, tolled the statute of limitations for any claims against Proskauer up to and including July 31, 2011. Ultimately, the IRS ruled the shelter transaction was not entitled to favorable capital gains tax treatment and assessed plaintiffs back taxes, penalties and interest amounting to millions of dollars.
In December 2010, plaintiffs became aware of a decision in a federal case in Massachusetts District Court (Fidelity Intl. Currency Advisor A Fund, LLC v United States, 747 F Supp 2d 49 [D Ma 2010]). That case was brought by a former Proskauer client who had executed a tax avoidance plan similar to that recommended to plaintiffs by Proskauer and Akselrad. The District Court, after a 44-day trial, issued findings of fact and conclusions of law which stated that the attorneys "agreed in advance to provide favorable legal opinions in order to induce taxpayer-investor" to get involved in the shelter opportunity, and that Proskauer and another law firm had "derived substantial profit from the promotion and sale of the tax shelter strategy, and therefore had a financial interest in upholding the strategy" (747 F Supp 2d at 212, 213).
In July 2011, plaintiffs commenced this action against defendants.
this Court has stated that, where an attorney enters into a business transaction with a client whereby the two parties' interests may at some point diverge, the ethics rules place on the attorney the burden of obtaining the client's consent, after full disclosure, "irrespective of the sophistication of the client" (Forest Park Assoc. Ltd. Partnership v Kraus, 175 AD2d 60, 62 [1st Dept 1991] [holding that law firm should have been disqualified from representing the plaintiff in a litigation, which was an entity in which 49 of its partners were investors, where the firm had previously represented the defendant in connection with the transaction in which the entity was formed]; accord Schlanger v Flaton, 218 AD2d 597, 602-603 [1st Dept 1995]). Accordingly, defendants were required to place plaintiffs' interests above all else, without regard to their perceived pedigrees, fortunes or business savvy.
Indeed, the mere facts that plaintiffs were wealthy and could afford high-priced counsel are insufficient for us to draw the conclusion that, as a matter of law, they should have known that there was almost a 50% possibility that the tax strategy would not succeed. On this record, defendants cannot establish the specific backgrounds of plaintiffs and their familiarity with the tax code and IRS practices such that defendants can argue that plaintiffs were not justified in relying on defendants' advice. Ironically, this argument by defendants bolsters plaintiffs' excessive fee claim, since it invites the question why, if they were truly so sophisticated, they needed a $425,000 opinion from Proskauer to convince them to pursue the TDG/Proskauer strategy. Further, it is worth noting that one of the things a sophisticated investor is presumed to know to do before entering a transaction is to consult with its attorney (see Stuart Silver Assoc. v Baco Dev. Corp., 245 AD2d 96, 99 [1st Dept 1997]). That is precisely what plaintiffs did, and they were entitled to rely on defendants' advice.
Finally, plaintiffs' claim for punitive damages properly survived dismissal. Defendants' conduct is alleged to have been directed at a wide swath of clients, and the first amended complaint sufficiently alleges intentional and malicious treatment of those clients as well as a "wanton dishonesty as to imply a criminal indifference to civil obligations" (Walker v Sheldon, 10 NY2d 401, 405 ). Indeed, although we offer no opinion regarding whether the particular scheme at issue was criminal in its manipulation of the tax laws, plaintiffs have demonstrated that similar tax avoidance schemes resulted in the indictments of some of their promoters. Accordingly, the demand for punitive damages is adequately stated. Defendants cite Denenberg v Rosen (71 AD3d 187 [1st Dept 2010], lv dismissed 14 NY3d 910 ) for the purported proposition that an attorney's involvement in promoting an unsuccessful tax avoidance scheme can never support a claim for punitive damages. However, this Court made no such declaration in that case. Nor did this Court find in Denenberg that the pension plan at issue was generally defective. Rather, it held that "it was the operation of plaintiff's particular plan that caused the problems with the IRS" (71 AD3d at 195) (emphasis added).
The Ohio Supreme Court has enjoined further unauthorized law practice by a non-lawyer who signed a pleading on behalf of his girlfriend
VanLandingham has never been admitted to the practice of law in Ohio and is not otherwise authorized to practice law in this state. In his answer to relator’s complaint, VanLandingham admitted that he prepared a motion to set aside a plea agreement and to vacate the guilty plea of his codefendant, Meghan E. Link, but he claimed that he filed it on his own behalf and that because he had forgotten to sign it, he merely attempted to file it. The certified journal report of the case, submitted with relator’s motion for summary judgment, states that the motion was not signed and should not have been docketed.
The unauthorized practice of law is the rendering of legal services for another by any person not admitted or otherwise certified to practice law in Ohio. Gov.Bar R. VII(2)(A). This includes the “preparation of pleadings and other papers incident to actions and special proceedings and the management of such actions and proceedings on behalf of clients before judges and the courts.” Land Title Abstract & Trust Co. v. Dworken, 129 Ohio St. 23, 194 N.E. 650, paragraph one of the syllabus (1934).
The board found that by drafting and filing, or attempting to file, a motion to set aside a plea agreement and to vacate a guilty plea on behalf of Meghan Link in Toledo Municipal Court case No. CRB-12-04420, VanLandingham engaged in the unauthorized practice of law. We agree.
A former senior immigration official has sought consent disbarment in Illinois in the wake of his criminal conviction.
From the motion
Starting on June 7, 1998, Movant was employed as Assistant Chief Counsel by the Office of Chief Counsel, which was a department of the Office of Principal Legal Advisor, within the United States Immigration and Customs Enforcement ("ICE"). As Assistant Chief Counsel, Movant was responsible for arguing on behalf of the government in civil administrative deportation removal hearings and providing legal advice to the other components of ICE.
Between October, 2004 and June, 2008, Movant and Maria Gabriela Kallas, his wife, utilized a recruiter who sought out undocumented aliens and legal permanent residents and who told the prospective clients that Movant was a high-level immigration official who could help them obtain work authorization permits and permanent residency status in exchange for a fee. After the recruiter collected the required fee and documents, the recruiter delivered the fee and documents to Movant and Movant’s wife. Movant and his wife utilized two shell corporations to submit false information to the United States Custom and Immigration Service and the United States Department of Labor claiming that at least 45 undocumented aliens were being hired to occupy skilled labor positions in one of the shell companies. Movant also filed false documents for at least two permanent residents.
Movant and his wife charged each alien between $10,000 and $20,000 for submitting the false documentation. Movant and his wife collected amounts totaling at least $950,000 through their immigration scheme.
after a jury trial, Movant was found guilty of 36 counts of the second superseding indictment. Movant was found guilty of conspiracy, in violation of Title 18 United States Code, Section 371; bribery, aiding and abetting and causing an act to be done, in violation of Title 18 United States Code, Section 201(b)(2); obstruction of justice, aiding and abetting and causing an act to be done, in violation of Title 18, United States Code, Section 1505.2(a); fraud and misuse of entry documents, aiding and abetting and causing an act to be done, in violation of Title 18 United States Code, Section 1546(a), 2(a), and 2(b); false statements, in violation of Title 18 United State Code, Section 1001, 2(a) and 2(b); false statement and fraud to obtain federal employees’ compensation, in violation of United States Code, Section 1920; and tax evasion, aiding and abetting and causing an act to be done, in violation of Title 26 United States Code, Section 7201, 18 United States Code 2(a) and 2(b).
He was sentenced to 212 months in prison. (Mike Frisch)
Thursday, April 30, 2015
The full Massachusetts Supreme Judicial Court affirmed the denial of admission decision of a single justice.
The problem involved, among other things, failures to disclose information in response to questions on the bar application.
There was also this
In support of his application, Britton submitted three letters of recommendation. One of those letters was from an attorney who had obtained a criminal complaint against Britton and whom Britton had sued. After investigation, the board determined that the criminal complaint was dismissed with an order that Britton pay restitution, and that the civil matter was settled under terms requiring the attorney to provide a positive letter of recommendation. In his application, Britton stated that the attorney had written the letter "[i]n an effort to minimize the damage he has done." The board found that Britton attempted to mislead it as to the nature of the recommendation.
The applicant was involved in a number of pro se actions
[he] has a substantial history of initiating pro se legal actions, the majority of which have been unsuccessful, and some of which have resulted in sanctions or an order to pay restitution.
He also had engaged in unauthorized law practice in Connecticut.
On the record before us, therefore, we are "left with grave doubt about [Britton's] present character and fitness to practice law. We resolve that doubt 'in favor of protecting the public by denying admission.'" Desy, supra. Britton has not met his burden of demonstrating that he presently "possesses the necessary qualification to practice law in the Commonwealth." Matter of Prager, 422 Mass. at 100. See Matter of an Application for Admission to the Bar of the Commonwealth, 444 Mass. at 398, quoting Matter of Prager, supra (applicant has burden "of demonstrating that his admission to the bar would not be 'detrimental to the integrity of the bar, the administration of justice, or the public interest'"). As the board found, "Britton's disregard for the rules and standards by which the legal system operates and for which the legal process is structured, show his unwillingness to conduct himself with respect for the law and his inability to use sound judgment in conducting professional business." This, coupled with his demonstrated lack of candor, amply supports the board's recommendation that the application be denied.
Last week the District of Columbia Court of Appeals imposed reciprocal discipline for misconduct that it has never (so far as I am aware) sanctioned in an original case - the failure to pay court-ordered child support.
Respondent, a member of the Bar of this Court, was indefinitely suspended from the practice of law in Maryland, by consent, by the Maryland Court of Appeals on May 13, 2014. In the Joint Petition for Indefinite Suspension by Consent in Maryland, respondent agreed that sufficient evidence could be presented to sustain allegations that he owed $22,654.56 in child support payments and that his conduct violated Maryland Rules of Professional Conduct 8.4(a) and 8.4(d).
The court rejected a plea for a non-suspension, finding that no exception to reciprocal discipline had been established.
The attorney is indefinitely suspended in D.C. and can seek reinstatement if reinstated in Maryland or after five years, whichever is sooner. (Mike Frisch)
The Arizona Presiding Disciplinary Judge approved a 30-day suspension and probation for a year of an attorney who initially had resisted a client's interest in a sexual relationship.
He agreed to the relationship shortly thereafter and compounded the problem by accepting a $10,000 loan from the client.
Mr. Ketcham was retained by the complainant on November 20, 2009, with a memorandum of engagement defining the scope of representation. His billing statements demonstrated that his legal services spanned from November 20, 2009 through January 2012.
On December 7, 2009, complainant invited Mr. Ketcham to a business meeting over dinner. On December 8, 2009, Mr. Ketcham informed complainant by e-mail that any romantic involvement would violate the rules of the State Bar. Emails were exchanged and as no romantic relationship had yet occurred, he directed the complainant to forward the redraft letter, and stated “at this point, I can still be your attorney.” Complainant responded that she wanted to move forward on a personal level, but offered to proceed on a friendly professional level as client/attorney in the alternative.
On December 16, 2009, Mr. Ketcham and the complainant entered into a sexual relationship. On December 17, 2009, Mr. Ketcham reiterated his concern about violating the ethical rules, but failed to explain why such a relationship with a client would violate the rules. One year into their sexual relationship, complainant volunteered to loan Mr. Ketcham $10,000.00 (interest free, unsecured, and with no deadline) to assist him with his child custody proceedings. Mr. Ketcham accepted the offer but failed to advise the client to seek independent legal advice and never obtained her informed consent.
The romantic relationship ended on January 18, 2012 for reasons unrelated to Mr. Ketcham’s legal representation. On January 19, 2012, complainant terminated Mr. Ketcham. On February 2, 2012, complainant directed Mr. Ketcham to repay the loan by February 9, 2012. Mr. Ketcham sought to offset attorney fees owed him for $1590. Complainant agreed to exchange checks instead.
The complainant was the widow of a University of Arizona professor. The representation involved his intellectual property and a manuscript.
The emails between the two are set forth in the pleadings.
One from her to him suggests that they "sacrifice our perfect business relationship for a more personal, magical one."
The magic ended badly and the bar complaint ensued. (Mike Frisch)
Wednesday, April 29, 2015
The United States Supreme Court has upheld a Florida ban on judicial candidates personally seeking campaign contributions.
The majority opinion of the Chief Justice makes clear the distinction between judicial and other elections.
Our Founders vested authority to appoint federal judges in the President, with the advice and consent of the Senate, and entrusted those judges to hold their offices during good behavior. The Constitution permits States to make a different choice, and most of them have done so. In 39 States, voters elect trial or appellate judges at the polls. In an effort to preserve public confidence in the integrityof their judiciaries, many of those States prohibit judges and judicial candidates from personally soliciting funds for their campaigns. We must decide whether the First Amendment permits such restrictions on speech.
We hold that it does. Judges are not politicians, even when they come to the bench by way of the ballot. And a State’s decision to elect its judiciary does not compel it to treat judicial candidates like campaigners for political office. A State may assure its people that judges will apply the law without fear or favor—and without having personally asked anyone for money. We affirm the judgment of the Florida Supreme Court...
The desirability of judicial elections is a question that has sparked disagreement for more than 200 years. Hamilton believed that appointing judges to positions with lifetenure constituted "the best expedient which can be devised in any government to secure a steady, upright, and impartial administration of the laws." The Federalist No. 78, at 465. Jefferson thought that making judges "dependent on none but themselves" ran counter to the principle of "a government founded on the public will." 12 The Works of Thomas Jefferson 5 (P. Ford ed. 1905). The federal courts reflect the view of Hamilton; most States have sided with Jefferson. Both methods have given ourNation jurists of wisdom and rectitude who have devotedthemselves to maintaining "the public’s respect . . . and a reserve of public goodwill, without becoming subservientto public opinion." Rehnquist, Judicial Independence, 38U. Rich. L. Rev. 579, 596 (2004).
It is not our place to resolve this enduring debate. Our limited task is to apply the Constitution to the question presented in this case. Judicial candidates have a First Amendment right to speak in support of their campaigns. States have a compelling interest in preserving public confidence in their judiciaries. When the State adopts a narrowly tailored restriction like the one at issue here, those principles do not conflict. A State’s decision to elect judges does not compel it to compromise public confidence in their integrity
Dissenting Justice Scalia takes the majority to task for what he calls "twistification" of the First Amendment
This Court has not been shy to enforce the First Amendment in recent Terms—even in cases that do not involve election speech. It has accorded robust protectionto depictions of animal torture, sale of violent video gamesto children, and lies about having won military medals. See United States v. Stevens, 559 U. S. 460 (2010); Entertainment Merchants, 564 U. S. ___; Alvarez, 567 U. S. ___. Who would have thought that the same Court would today exert such heroic efforts to save so plain an abridgement ofthe freedom of speech? It is no great mystery what isgoing on here. The judges of this Court, like the judges of the Supreme Court of Florida who promulgated Canon 7C(1), evidently consider the preservation of public respect for the courts a policy objective of the highest order. So it is—but so too are preventing animal torture, protectingthe innocence of children, and honoring valiant soldiers. The Court did not relax the Constitution’s guarantee of freedom of speech when legislatures pursued those goals; it should not relax the guarantee when the Supreme Court of Florida pursues this one. The First Amendment is not abridged for the benefit of the Brotherhood of the Robe. I respectfully dissent.
Justices Thomas joined the Scalia dissent. Justices Alito and Kennedy also wrote dissents. (Mike Frisch)
A dissatisfied bar complainant cannot compel disciplinary action in the courts, according to a decision issued today by the Massachusetts Supreme Judicial Court.
Jay Edward Simkin filed a petition in the county court alleging that certain attorneys had committed breaches of the rules of professional conduct in connection with proceedings involving the revocation and reinstatement of his license to carry firearms. He requested that this court enter findings to that effect, which, he claimed, would lead to bar counsel's reconsideration of her decision not to pursue his complaints against the attorneys. The record indicates that the Board of Bar Overseers (board) reviewed bar counsel's decision not to take further action. A single justice denied Simkin's petition without a hearing, reasoning that an "individual who files a complaint with the board lacks standing to challenge in a court action the board's decision not to prosecute the complaint." Simpkin appeals.
There is no private action for attorney discipline
That is essentially what Simkin seeks to accomplish here. He filed complaints with the board, as was his right; bar counsel investigated but declined to pursue them; and, after review, the board determined not to proceed. Simkin has no further standing in the matter.
The full court affirmed a single justice. (Mike Frisch)
Kathleen Maloney reports this case on the web page of the Ohio Supreme Court
The Ohio Supreme Court has suspended a Cleveland lawyer and former assistant county prosecutor for two years following his convictions for using a law enforcement database for personal reasons and threatening and harassing his ex-wife.
Rosel C. Hurley III was employed by the Cuyahoga County Prosecutor’s Office between October 2011 and April 2012. While going through a divorce at the time, Hurley accessed the Ohio Law Enforcement Gateway, a statewide law enforcement network that includes criminal histories and other records. Searching the database for personal reasons was prohibited, but Hurley accessed it 30 to 40 times for information about his ex-wife and children. He also made harassing phone calls to his former spouse and threatened to physically harm her.
Hurley pled guilty to multiple felony counts of unauthorized property use and misdemeanor menacing and harassment charges. In February 2013, he was sentenced to community control for one year and fined $5,000.
Disciplinary Actions The Cleveland Metropolitan Bar Association charged Hurley with professional misconduct related to these matters. In March 2013, the Ohio Supreme Court suspended his license on an interim basis because of his felony convictions. The state disciplinary board recommended a two-year suspension with credit for the time he served during the interim suspension.
Court Adjusts Sanction In a 4-3 per curiam opinion, the court agreed with the board’s misconduct findings and sanction but gave no credit for the interim suspension time. The court noted that this case involves more aggravating factors than a 2012 case cited by the disciplinary board. Hurley was in a position of public trust, had a dishonest motive, did not comply with an Ohio Lawyers Assistance Program (OLAP) contract, and could not recall basic facts about his menacing conviction.
If Hurley applies to be reinstated to practice law, he must be examined by OLAP and follow its treatment recommendations, and he must meet his continuing education requirements and other mandates from the court office that regulates lawyers in the state. If reinstated, Hurley must serve two years of probation to ensure his continued compliance with OLAP’s conditions.
Votes Joining the court’s majority were Chief Justice Maureen O’Connor and Justices Terrence O’Donnell, Sharon L. Kennedy, and Judith L. French.
Justices Paul E. Pfeifer, Judith Ann Lanzinger, and William M. O’Neill would have given Hurley credit for the time he has served during his interim suspension.
The Oklahoma Supreme has ordered the interim suspension of an attorney convicted of misdemeanor pointing a firearm.
Tulsa World had this January 1, 2015 story
A man Tulsa police said was responsible for a seven-hour standoff Tuesday night after threatening to kill his ex-wife is a former member of the Oklahoma House of Representatives and a licensed Tulsa attorney.
John “Chris” Hastings, 59, was arrested just before midnight Tuesday inside his home in the 6800 block of East 65th Street.
According to Hastings’ arrest report, the former legislator pointed a loaded firearm at his ex-wife’s head, asking her “if she wanted to be shot in the head or stomach.”
According to the report, Hastings also told his ex-wife “you are going to die today.”
The birthdate on Hastings’ arrest report matches the birthdate in his legislative profile.
The address where he was arrested Tuesday matches the address in previous arrest and protective order documents.
No one was physically harmed during the encounter, according to police, and Hastings was eventually removed from the residence by TPD’s special operations team, the affidavit states.
He was booked into the Tulsa jail in lieu of $20,500 on pointing a deadly weapon and resisting arrest complaints, jail records show. He bonded out at 8:36 a.m. Wednesday.
Hastings, who holds degrees from the University of Notre Dame and the University of Tulsa, according to his biography page at his law firm’s website, was elected in 1994.
He left politics in 2005 after his term limit expired and has since been practicing law in the state, according to the Oklahoma Bar Association. The Hastings and Associates website says Hastings founded the law office in 2001.
Phone calls to Hastings and Associates were not returned Wednesday.
In 2011, Hastings’ wife filed for divorce, but later reconciled with her husband, and the divorce was never granted.
The pair also filed protective orders against each other that year — she alleged that he had been abusing drugs and had become violent toward her, and he alleged that his wife had attacked him with both her hands and a knife.
The Hastings eventually divorced last June.
In 2012, two protective orders were granted after Hastings’ brother-in-law alleged he had recorded phone conversations where Hastings had threatened “to kill or have killed me and my family.”
The protective orders also alleged Hastings had threatened and harassed his wife throughout that time.
Those protective orders were dismissed after neither party showed up to a scheduled court appearance last January.
Hastings was charged last February with two misdemeanor counts of domestic assault and battery after his daughter alleged that he had punched her twice in the face.
Hastings’ son and wife said they did not see him punch his daughter, but the affidavit filed states she “had evidence of a bloody nose and redness on her right cheek.”
Those charges were dismissed in May due to an “uncooperative” prosecution witness, court records state.
Tuesday, April 28, 2015
A disciplinary matter involving a prosecutor's misconduct that led to a 90-day suspension in Arizona drew a whopping increase to two years and a day as reciprocal discipline by the Oklahoma Supreme Court.
There is no question that Respondent engaged in multiple conversations with a confidential intermediary appointed by the trial court to aid the defense in a capitol murder case. While the conversations themselves were not the basis for Respondent's discipline in Arizona, this Court considers them to be troubling at the very least. As his own submissions indicate, Respondent is a seasoned and decorated prosecutor. Respondent should have brought his concerns about the defense's interaction with the CI to the trial court. Rather than doing so, Respondent took it upon himself to communicate with the CI on multiple separate occasions from his office and on his cellular phone.
Further, the uncontroverted facts reveal that after others became aware of his contact with the CI, at every stage Respondent failed to be candid with the defense, the trial court, his own co-counsel, and the Arizona Attorney General's Office about the true extent of his interactions. Respondent's initial disclosure of his first conversation with the CI led everyone involved to believe it was the only one, despite other conversations having occurred prior to Respondent mentioning the first one. In response, Respondent contended that he did not disclose his conversations because he did not believe he had an obligation to do so.
On multiple occasions, Respondent failed to disclose that there was a witness to his first conversation with the CI, and his position is that he did not remember that there was one until well into the controversy. More telling, however, is that in multiple filings signed by Respondent submitted to the trial court, he failed to inform the court of the true number of interactions between himself and the CI. He failed to do this based upon his own personal determinations of what should and should not be relevant for the trial court's consideration of the defense's motion to recuse, substituting his own personal judgment for that of the court. His reasons aside, there is no question that respondent misled the defense, the trial court, his co-counsel, and the Attorney General's office, and Respondent agreed that doing so was both prejudicial to the administration of justice and worthy of suspension in Arizona.
A much greater sanction than agreed on in Arizona was deemed appropriate
Respondent was a seasoned prosecutor by the time the events that subjected him to discipline in Arizona occurred. "The well-being of our judicial system to a large extent rises or falls on the trust the people have in those holding either prosecutorial or judicial offices." In the Matter of the Reinstatement of Page, 2004 OK 49, ¶19, 94 P.3d 80. By continuously failing to provide a complete picture to other counsel and the trial court concerning his interactions with the defense's CI, Respondent violated that trust and potentially compromised the prosecution of an alleged murderer. Respondent had multiple opportunities to provide a complete explanation and timeline of his actions to his co-counsel, the defense, and the trial court, yet he failed to do so. After Respondent was removed from the case by his superiors, his actions left his office scrambling to file a supplemental response to clarify its previous submissions after phone logs finally revealed the full extent of Respondent's interactions with the CI.
Respondent did not tell the court the whole truth. He took it upon himself to decide what the trial court needed to know to rule on a request for his recusal due to his communications with the CI. Respondent's acts were prejudicial to the administration of justice, and there is simply no excuse for his lack of honesty under the circumstances.
Having handled a number of reciprocal discipline matters myself, I am dubious about the utility of a significant ratcheting up of sanction. This is particularly true in a matter where the original sanction was achieved by consent of the attorney and disciplinary counsel.
This footnote was interesting
Respondent's Response to Complainant's Reply to Show Cause Order and Submission in Mitigation of Discipline provides in part:
In addition to Respondent's direct submissions in support of mitigation, this Court may also consider Respondent's two-decade career in Oklahoma. While prosecuting some of Oklahoma's most difficult and terrible cases, including securing the convictions of defendants after others had been wrongfully convicted and then exonerated, Respondent was never disciplined by this Court. He never had to be; his record is that of an excellent prosecutor who continuously learned from both mistakes and triumphs and worked tirelessly to see justice done.
While Respondent is correct that he has never been subjected to discipline by this Court, the Court of Criminal Appeals has more than once had occasion to cast doubt on Respondent's characterization of his career as an Oklahoma prosecutor. See Mitchell v. Oklahoma, 2006 OK CR 20, ¶103, 136 P.3d 671 (Death sentence reversed based in part upon Respondent's "serious and potentially prejudicial misconduct."); Stouffer v. State, 2006 OK CR 46, 147 P.3d 245 (Characterizing Respondent's questioning as "more akin to prosecutorial misconduct" and "extremely improper and irrelevant.").
The Maryland Court of Special Appeals has held that the litigation privilege requires dismissal of an action brought by a party ("OBG") who had settled a claim with a mutual non-disparagement clause.
After the settlement, the other party went to trial against another defendant.
This claim was based on OBG's contention that the plaintiff's attorney violated the provision in opening statement by accusations against the defendant who had settled.
Well over 100 years ago the Court of Appeals recognized in Maryland common law an absolute litigation privilege that immunizes litigation participants from liability in tort for words spoken or written in the course of a judicial proceeding. It crafted an absolute litigation privilege for Maryland that is a hybrid of the English and American versions of that privilege. Lawyers are protected by the American version, which immunizes them from liability in tort for words spoken or written in the course of a judicial proceeding so long as the words are relevant to the proceeding... (citations omitted)
Lawyers are duty bound by the Maryland Lawyer’s Rules of Professional Conduct to zealously advocate for their clients, which includes introducing evidence that supports their clients’ positions and presenting argument in furtherance of their clients’ claims or defenses. See Preamble to MRPC (“as advocate, a lawyer zealously asserts the client’s position under the rules of the adversary system.”). The specter of civil liability for words spoken or written in the course of a judicial proceeding will inhibit lawyers from abiding by their professional obligation to advocate zealously, imperiling the rights of their clients. See T. Leigh Anenson, “Absolute Immunity from Civil Liability: Lessons for Litigation Lawyers,” 31 Pepp. L. Rev. 915, 922 (2004); see also Greenberg Traurig, LLP v. Frias Holding Co., 331 P. 3d 901, 903 (Nev. 2014) (explaining that “[t]he policy behind the [litigation] privilege, as it applies to attorneys participating in judicial proceedings, is to grant them as officers of the court the utmost freedom in their efforts to obtain justice for their clients.”) (internal quotation marks and citations omitted) (alteration in Greenberg).
Thus, the contentions at the trial were immunized from the assertion that they violated the non-disparagement clause.
The court also affirmed the trial court's denial of a motion to disqualify counsel as a necessary witness.
Judge Nazarian dissented
The ultimate question...is whether the City agreed, as part of settling its differences with OBG, not to disparage OBG in the Plant Upgrade Case. The outcome of that question depends in the first instance on what the parties intended the non-disparagement clause to cover. The circuit court erred in dismissing the case in the face of that looming factual dispute, and I would reverse and remand on that basis. From there, I would hold that the City could well have agreed to limit its litigation positions in the ongoing litigation, whether viewed as a positional or tactical decision or as a waiver of the litigation privilege, and direct the circuit court on remand to address OBG’s claims against that backdrop. And for those reasons, I respectfully dissent.
The Massachusetts Supreme Judicial Court has affirmed a denial of a motion to dismiss a criminal case, rejecting the argument that Rule of Professional Conduct 3.8(f) mandated a contrary result
In the Superior Court, Forlizzi (joined by Battista) moved to dismiss the indictments, alleging that, during the investigation leading to the indictments, the Commonwealth had engaged in prosecutorial misconduct. They claimed that the Commonwealth caused the grand jury to subpoena the bank records of trial counsel in violation of Mass. R. Prof. C. 3.8 (f), 426 Mass. 1397 (1998), and that the Attorney General improperly obtained counsels' tax records though the insurance fraud bureau.
A Superior Court judge denied the motion, concluding that the proscription of rule 3.8 (f) does not apply to thirdparty record holders such as banking institutions, but that the mechanism used by the prosecutors to obtain the attorneys' tax records constituted overreaching. The judge determined, however, that dismissal of the indictments as a sanction was not warranted in the circumstances...
The petitioners' claims generally involve due process considerations, alleged violations of the attorney-client relationship, and infringement on the right to counsel. They have not, as is their burden, demonstrated that those claims involve violation of any right that cannot be remedied in a direct appeal if and when the petitioners are convicted.
An interesting case from the Ohio Supreme Court is summarized by Kathleen Maloney
The Ohio Supreme Court today suppressed evidence taken from the computer of a Twinsburg man because the detective’s statement requesting the search warrant lacked probable cause and the subsequent warrant did not specifically state the items to look for on the computer.
In the 4-3 decision, the Supreme Court adopted a test to apply when considering a challenge to a search warrant in a motion to suppress evidence.
The court, in an opinion written by Justice Sharon L. Kennedy, reversed the Ninth District Court of Appeals’ judgment and returned the case to the trial court for more proceedings after eliminating the wrongly obtained evidence.
Prosecutor’s Vehicles Vandalized In April 2010, Nicholas Castagnola was charged with selling alcohol to minors by the Twinsburg law director and prosecutor, David Maistros. Two months later, Maistros found his vehicles egged and damaged.
An informant shared text messages from Castagnola with a police officer in which Castagnola gloated about damaging Maistros’ vehicles. In a secretly recorded conversation, Castagnola also told the source that he and another man had egged the automobiles, and he mentioned he had looked up the prosecutor’s address in court records.
Police Seek Warrant to Search House, Computer A police detective filed an affidavit with the local court for a search warrant of Castagnola’s home. The document stated that items found would be taken as evidence of criminal charges for retaliation, criminal trespassing, criminal damaging, and possession of criminal tools. The affidavit quoted the text messages and summarized the recorded conversation, but did not include the recording itself or a transcript of the exchange. A judge issued the search warrant, and several items, including two computers, were seized from Castagnola’s house.
When checking for images associated with court web sites, the forensic analyst in the case saw images she thought might be child pornography, and she requested another warrant.
Defendant Found Guilty In December 2010, Castagnola asked the trial court to suppress the evidence taken from the computer. The court overruled the motion. Castagnola was found guilty of retaliation, criminal damaging, vandalism, criminal trespassing, and possession of criminal tools. He was also found guilty of 10 counts of pandering sexually oriented material involving a minor. The court sentenced him in October 2011 to a 30-month prison term, and he was classified as a tier II sex offender.
Castagnola appealed to the Ninth District, contesting the legality of the detective’s affidavit and the search warrant. The appeals court upheld the trial court’s ruling.
Test to Analyze Warrant’s Validity Based on the recording, the police detective concluded that Castagnola had found information about Maistro online and indicated that conclusion in his affidavit requesting the search warrant. Justice Kennedy noted that probable cause for a warrant is determined based on the “four corners” of the affidavit when no oral testimony is presented.
To review the validity of the warrant, Justice Kennedy adopted a test presented in People v. Caffott (1980), a decision from a California appeals court. The case examined when police interpretation of facts crosses the line into usurping a magistrate’s responsibility when issuing warrants.
The test evaluates whether a hidden inference is relevant to the magistrate’s inquiry in determining whether to approve a warrant. The test also looks at whether the leap from the facts to the affidavit’s conclusions is complex enough that the magistrate should have had the opportunity to review the inference’s validity.
“If the inference is significant, then the trial court should examine the affiant’s animus,” Justice Kennedy wrote. “If the affiant acted intentionally or with conscious indifference, then the warrant should be invalidated and the evidence suppressed. … However, if the affiant acted negligently, then the misstatement should be removed, the omitted underlying facts added, and the affidavit reassessed.”
Probable Cause Not Established Justice Kennedy explained that while the detective thought Castagnola checked online for information about the prosecutor, Castagnola never said anything in the recording about doing an online search, and the affidavit’s “online” references were relevant to the magistrate’s decision. In addition, the detective’s inference from the recording was complex and should have been disclosed to the magistrate, she noted. She concluded that the undisclosed inference usurped the magistrate’s authority.
She reasoned, however, that the detective did not undermine the magistrate’s role intentionally or with indifference. Following Caffott, Justice Kennedy reassessed the probable cause basis for the search of Castagnola’s computer and determined that no evidence from the texts or the recording indicated that he used a computer at home to further his alleged crimes. How Castagnola searched for Maistros’ address was unclear, she noted.
While the dissent criticizes the Caffott test because it is from an out-of-state appeals court, Justice Kennedy wrote that the Supreme Court regularly turns to other states when considering new legal issues and has adopted on-point and persuasive reasoning from those cases.
Warrants Must Be Specific, Not Sweeping The court then turned to whether the search warrant described in detail what police were to search for on Castagnola’s computer. Justice Kennedy noted that the warrant allowed the search of records and documents stored on computers without any limitations.
The Fourth Amendment requires a warrant to “particularly describ[e] the place to be searched, and the persons or things to be seized.” Based on that mandate, Justice Kennedy concluded that details about the records or documents sought from the computer should have been included in the warrant “to guide and control the searcher and to sufficiently narrow the category of records or documents subject to seizure.”
“We agree that the Fourth Amendment does not require a search warrant to specify restrictive search protocols, but we also recognize that the Fourth Amendment does prohibit a ‘sweeping comprehensive search of a computer’s hard drive,’” she explained. “The logical balance of these principles leads to the conclusion that officers must describe what they believe will be found on a computer with as much specificity as possible under the circumstances. This will enable the searcher to narrow his or her search to only the items to be seized.”
Good Faith Exception Does Not Apply While acknowledging that one instance of police negligence does not require the related evidence to be excluded, Justice Kennedy noted “the negligent inclusion of the undisclosed inference is just the tip of the iceberg here.”
“The affidavit was so lacking in indicia of probable cause and the warrant was so facially deficient in failing to particularize the items to be searched for on Castagnola’s computer that the detective could not have relied on it in objective good faith,” she wrote.
She noted the difficulty of this case given Castagnola’s “despicably malicious” actions and the “horrifically objectionable” photos found on his computer.
However, “[a] search cannot depend on mere suspicion,” she reasoned. “Where a privacy intrusion is based on blatant conjecture that evidence exists on a computer in a residence because of a text-message admission of vandalism, the societal benefits of suppressing the evidence outweigh the societal risks of harm.”
The case returns to the trial court to proceed without the evidence obtained from the invalid search.
Votes The majority opinion was joined by Justices Paul E. Pfeifer, Terrence O’Donnell, and William M. O’Neill. Justice Judith Ann Lanzinger wrote a dissenting opinion joined by Chief Justice Maureen O’Connor and Justice Judith L. French.
In Dissent Justice Lanzinger rejected the majority opinion, stating “[w]ithout fully discussing our standard of reviewing the totality of the circumstances, the majority adopts the reasoning of a 35-year-old, out-of-state, intermediate court to change the law of Ohio.” She emphasized her view that the proper standard for determining whether probable cause exists for a search warrant depends on an examination of the “totality of the circumstances,” as reiterated by the court this year in State v. Jones.
To prove a Fourth Amendment violation, a defendant must show that a false statement was made intentionally or with reckless disregard for the truth, she explained. While the word “online” was not said in the recording, Justice Lanzinger noted that the detective’s affidavit did not state that it was quoting Castagnola and that the detective said he honestly believed Castagnola had mentioned searching online. There was no intentional deception or reckless disregard, she concluded.
“Under the majority’s approach, a negligent misstatement within an affidavit causes the entire affidavit to be subject to reassessment without any deference to the issuing magistrate,” Justice Lanzinger wrote. In her opinion, the Caffott test is not consistent with case law and does not follow the U.S. Supreme Court holding that facially-valid search warrants should not be invalidated unless a false statement was made intentionally or with reckless disregard for the truth.
She reasoned that the magistrate had a “substantial basis” for issuing the warrant based on the listed offenses, the quoted text messages, and the summary of the recorded conversation.
“For a search warrant to issue there needs to be only a fair probability that evidence will be found in a particular place,” she wrote. “Given today’s ubiquitous use of technology to obtain information, it is more than likely that Castagnola found the information online.”
Justice Lanzinger also “strenuously dissent[ed]” from the majority’s determination that the warrant was not executed in good faith by the officers.
In addition, she would not have addressed Castagnola’s claims related to the Fourth Amendment’s particularity requirement. She does not agree that the particularity issue was implicit in Castagnola’s probable cause arguments, so she would have concluded that Castagnola failed to raise the issue in the lower courts.
A public reprimand was imposed by the Wisconsin Supreme Court for an attorney's failure to attend to multiple matters
Briefly stated, over a period of several months in 2010, Attorney Stobbe missed a series of filing deadlines for several clients, failed to file appropriate appellate briefs, and then failed to respond to court orders directing filing and imposing sanctions. The record before us does not clearly indicate what led to this misconduct, but it appears that Attorney Stobbe was in poor health at the time.
The attorney also was required to pay costs, which were under $1,000. (Mike Frisch)
An attorney convicted on her plea of guilty to misprision of felony in Virginia federal district court has filed a motion for consent disbarment in Illinois
As part of that plea, Movant admitted that she held various roles at Gallant including office manager, identifying prospective customers for Gallant’s misbranded, non-FDA approved drugs, and arranging for the importation and distribution of the drugs. Included as the imported drugs were injectable chemotherapeutic agents, injectable cosmetic fillers, and injectable agents used to treat side effects of chemotherapy, many of which were subject to federally mandated strict temperature controls which were not complied with by Gallant.
On May 16, 2014, the Honorable Claude M. Hilton sentenced Respondent to nine months imprisonment in the Bureau of Prisons, one-year of supervised release, and a fine of $75,000.
This press release from the United States Attorney for the Eastern District of Virginia summarizes the case
According to information made public in court, between August 2009 and August 2013, Gallant Pharma smuggled into the United States and sold more than $12.4 million in non-FDA-approved chemotherapy drugs and injectable cosmetic drugs and devices, generating profits of $3.4 million. Many of these drugs were subject to strict temperature controls to protect drug potency. Gallant Pharma shipped and received such drugs with ice packs, not dry ice as used by legitimate distributors, and on at least one occasion, a shipment containing such drugs took more than two weeks to arrive in Virginia from overseas during a July 2012 heat wave. Many drugs sold by Gallant Pharma were also required to carry a FDA “black box” warning, which indicates that a drug carries a significant risk of serious or life-threatening adverse effects. The versions sold by Gallant Pharma did not meet this or other FDA labeling requirements.
Law360 had this report on the criminal case against Gallant. (Mike Frisch)
Monday, April 27, 2015
An order disqualifying counsel who is a necessary witness in the matter was affirmed by the New York Appellate Division for the First Judicial Department
The motion court providently exercised its discretion in granting petitioner's disqualification motion. Petitioner demonstrated that Wimpfheimer is "likely to be a witness on a significant issue of fact" (Rules of Professional Conduct [22 NYCRR 1200.0] rule 3.7[a]). Petitioner estate alleges, among other things, that respondent Wolf withdrew $65,000 from an account he held jointly with the estate's decedent, after he entered into a written agreement, signed on his behalf by Wimpfheimer, pursuant to which he agreed to turn over to the estate the funds remaining in the account after he made certain agreed upon payments. Since Wolf has asserted as a defense that he was unaware of that agreement, Wimpfheimer has become a significant witness concerning the negotiation of the agreement and whether he had actual or apparent authority to enter into the agreement on behalf of Wolf (see Tatalovic v Nightlife Enterprises, L.P., 69 AD3d 439 [1st Dept 2012]; Warshaw Burstein Cohen Schlesinger & Kuh, LLP v Longmire, 82 AD3d 586 [1st Dept 2011]). We note that Wimpfheimer's testimony is likely to be prejudicial to Wolf, unless he testifies that he acted without his client's knowledge or authority in entering into the agreement (see Rules of Professional Conduct [22 NYCRR 1200.0] rule 3.7[b]).
Appellants' assertion that Wimpfheimer cannot testify in the matter because Wolf would invoke the attorney-client privilege is without merit. Wolf waived the privilege by affirmatively placing the subject matter of his privileged communications (or lack thereof) concerning the agreement at issue in this litigation, "so that invasion of the privilege is required to determine the validity" of his defense, and "application of the privilege would deprive the adversary of vital information" (Deutsche Bank Trust Co. of Ams. v Tri-Links Inv. Trust, 43 AD3d 56, 63 [1st Dept 2007]).
A four-month suspension has been imposed by the Wisconsin Supreme Court for a series of alcohol-related criminal issues:
The referee noted that the allegations in the OLR's complaint involved Attorney Belke's conviction for seven misdemeanor counts. According to the OLR's complaint, on August 10, 2010, a deputy sheriff responded to a call of an intoxicated person, later identified as Attorney Belke, in the General Mitchell International Airport in Milwaukee. As a result of his conduct, Attorney Belke was arrested and charged with misdemeanor disorderly conduct. He entered a guilty plea and was convicted of misdemeanor disorderly conduct. His sentence included one day in jail and a $500 fine. Attorney Belke failed to notify the OLR of his misdemeanor disorderly conduct conviction.
There were also a number of domestic abuse incidents against his mother, DUI and bail jumping charges.
pursuant to a plea agreement, Attorney Belke pled no contest to and was convicted of the misdemeanor disorderly conduct (domestic abuse) charge that arose out of the June 6, 2012 domestic disturbance between Attorney Belke and his mother. He also pled no contest to two misdemeanor bail jumping charges arising out of the July 3, 2012 arrest. The remaining bail jumping charges were dismissed but read-in at sentencing. Attorney Belke's sentence included two years of probation with sentence withheld and conditions that he not possess any firearms, maintain absolute sobriety, not be on any premises licensed to sell alcohol by the drink, not possess any alcohol where he resides, undergo and comply with an alcohol and drug assessment, not have any violent contact with his mother, maintain full-time employment, and abide by any other rules or recommendations as imposed by the supervising probation agent. Attorney Belke failed to notify the OLR of his misdemeanor disorderly conduct (domestic abuse) conviction and his two misdemeanor bail jumping convictions.
Shortly after the plea, he rolled a vehicle over while driving under the influence
The referee noted that Attorney Belke's conduct did not involve dishonesty or failure to represent clients. The referee also noted that Attorney Belke has been in compliance with all treatment recommendations of all substance abuse providers, has abstained from all alcohol or other mood-altering substances, and has regularly participated in community-based support groups, such as Alcoholics Anonymous. The referee also pointed to Attorney Belke's lack of any prior disciplinary history. Based on what the referee termed "these mitigating factors," the referee concluded that a 90-day suspension was appropriate. As a condition, the referee recommends that Attorney Belke continue to participate in a monitoring contract with WisLAP and that he comply with the contract conditions relating to assessment and treatment.
He must honor the treatment agreement. (Mike Frisch).
A three-month suspension was imposed by the New York Appellate Division for the First Judicial Department as a result of an attorney's tax problems
Respondent, a native of the West Indies, worked for the New York City Law Department from 1994 until 2001, at which time he left to start a law firm. Since 2014, he has been a solo practitioner in the Bronx.
Respondent admitted that he failed to timely file his federal and New York State personal income tax returns, and to pay the applicable taxes, for the years 2004 through 2012. By way of explanation, he testified that, beginning in 2004, his attention was focused on providing financial assistance to his mother, who suffered from Alzheimer's disease and had lost her home as a result of Hurricane Ivan. Further, in 2008, respondent contributed $20,000 to help his sister with a struggling catering business.
Respondent did not take steps to address his tax debt until informed by the New York State tax authorities in 2012 that he was under investigation. At that point, he retained counsel, as well as an accountant to prepare and file his delinquent returns.
The court rejected a Hearing Panel's proposed five-month suspension
While respondent's misconduct was protracted, it was nonvenal and mitigated by his unblemished 25-year legal career and the financial pressures resulting from his late mother's and sister's situations. Respondent has accepted responsibility for his conduct; he has paid over $60,000 in restitution; and he is "desperately" trying to make arrangements to resolve his tax debt.
The attorney must affirm his agreement to pay off the remaining obligation. (Mike Frisch)
Sunday, April 26, 2015
From the web page of the Colorado Supreme Court
The Presiding Disciplinary Judge approved the parties’ conditional admission of misconduct and suspended Bruce A. Logan (Attorney Registration Number 14187) from the practice of law for ninety days, all stayed pending successful completion of a three-year period of probation. As conditions of probation, Logan must comply with court orders issued in a domestic relations case in Arapahoe County District Court and he must report to the Office of Attorney Regulation Counsel on his compliance with those court orders. The probation took effect April 16, 2015.
For about twenty months in total, Logan failed to pay child support as ordered by the Arapahoe County District Court. According to Logan, he was financially unable to meet those obligations. By failing to pay court-ordered child support, Logan violated Colo. RPC 3.4(c) (a lawyer shall not knowingly disobey an obligation under the rules of a tribunal) and Colo. RPC 8.4(d) (a lawyer shall not engage in conduct prejudicial to the administration of justice).
In addition, Logan stated on his 2014 attorney registration statement that he was in compliance with child support obligations, even though he knew he was not. By doing so, Logan violated Colo. RPC 8.4(c) (a lawyer shall not engage in conduct involving dishonesty, fraud, deceit, or misrepresentation).