Legal Profession Blog

A new low in the collegiality wars

A friend of mine from Houston forwarded me this letter (here), which has to be a new low in collegiality. [Nancy Rapoport]

AALS Professional Responsibility Section Newsletter Is Fresh Off the Presses

Posted by Alan Childress
The AALS Section of Professional Responsibility puts out a quarterly newsletter that is a gold mine (and today gold is worth its weight in gold) for any professor, student, lawyer, judge, or citizen interested in issues of legal ethics.  It is so substantively packed that we are once again grateful that they have allowed this blog to post it for the general public.  Thanks to Widener's Randy Lee (its general editor) and all of the academic contributors who make it so useful, for this generosity.  Try it here: Download AALSummer2008.pdf

Law Firm Insurance Coverage Issue Remanded

The New York Appellate Division for the First Judicial Department reversed a Supreme Court order holding that insurers of a law firm were not obligated to defend and indemnify the firm under excess professional liability insurance policies. The relevant facts are described in the court's opinion:

The law firm Pepper Hamilton and one of its members, W. Roderick GagnÉ, were deprived of millions of dollars in professional liability insurance coverage purchased by the firm, by the order of the motion court declaring that the three excess insurance carriers have no obligation to indemnify the firm. The court reasoned that because the law firm knew of misconduct on the part of its client, and of the likelihood that claims would be made against the firm itself based upon its representation of that client while the misconduct took place, it had an obligation to inform the insurers of its knowledge of the misconduct and its concern that it might be subject to suit as a result when applying for coverage or for renewal of coverage. As to two of the insurers, the court precluded coverage under the policies' "prior knowledge" exclusions, and as to the third, it held that the insurer was entitled to rescission of the policy effective the year the claims were made.

The underlying claims against counsel arise out of an alleged securities fraud scheme by the firm's former client, Student Finance Corporation (SFC) and its principal, Andrew Yao. SFC was in the business of financing loans to students in trade schools, primarily truck driving schools; it then pooled the loans into certificates or securities that it sold to investors, using private placement memoranda prepared by Pepper Hamilton. Another client of Pepper Hamilton, Royal Indemnity Company, provided credit risk insurance for the pooled loans.

It is asserted that in order to make its operations appear more successful, SFC falsely represented to investors that student loans in its securitized loan pool were not more than 90 days overdue and in default, when in fact, significant numbers of them were in default. In order to make it appear that student loans in the securitized loan pool were current, rather than more than 90 days overdue, SFC made forbearance payments from reserve accounts of its own. This practice resulted in SFC's understating its default rates, skewing its performance data for the student loans and making the certificates more attractive to investors, underwriters and credit risk insurers.

SFC's inaccurate representation of its default rates apparently began to come to light in or around March 2002, when a round of financing fell through after the lender uncovered SFC's use of forbearance payments through careful scrutiny of its financial documents. Without the new financing, SFC no longer had the liquidity to make up the monthly shortfalls in loan payments. According to GagnÉ, Yao first directly informed him in mid-March of SFC's practice of making forbearance payments for loans that would otherwise be declared in default. While Pepper Hamilton initially continued to represent SFC, after further consideration and interoffice consultation, it withdrew from its representation of SFC on April 24, 2002.

SFC was eventually forced into bankruptcy, and in April 2004, the bankruptcy trustee contacted Pepper Hamilton to request that it enter into a tolling agreement while he considered whether to bring any claims against the law firm. At this point, Pepper Hamilton notified its primary professional liability insurer, Westport Insurance Corporation, of the potential claim; the excess insurers — Executive Risk Indemnity Inc. (ERII), Continental Casualty Company and Twin City Fire Insurance Company — were notified as well.

In November 2004, the bankruptcy trustee commenced an action against the firm and GagnÉ; another action was commenced by Royal Indemnity in March 2005. These underlying professional liability claims against Pepper Hamilton and GagnÉ allege negligence in their failure to discover SFC's securities fraud, as well as actual complicity in SFC's fraudulent scheme.

The coverage issue could not be resolved by summary judgment. According to the court:

The evidence relied upon here, as discussed, simply shows that Pepper Hamilton knew of SFC's misconduct and believed (correctly) that it might itself be subjected to lawsuits brought by parties injured by SFC's actions. The questions of whether Pepper Hamilton gave false answers on Continental's renewal application and whether any such false answers were given in bad faith are questions of fact and cannot properly be determined as a matter of law in the context of a summary judgment motion. Even if we were to accept that the information omitted constituted information that was required by the policy renewal application, Continental fails to establish as a matter of law that if it had been informed of the client's misconduct and the firm's concern about being subject to suit as a result, it would have handled the renewal application differently. The affidavit of an underwriter asserting that, had the information been disclosed, the renewal application would have been handled differently, is not by itself sufficient to satisfy the insurer's burden.

(Mike Frisch)

Issue Moot

In an opinion filed on August 11, the Massachusetts Supreme Judicial Court dismissed as moot a challenge to the issuance of a grand jury subpoena to defense counsel's investigator in a criminal investigation:

The petitioner was charged in the District Court with various felonies. In connection with a subsequent grand jury investigation, the prosecutor sought approval from a judge in the Superior Court to subpoena an investigator hired by the petitioner's counsel. See Mass. R. Prof. C. 3.8(f), 426 Mass. 1397 (1998). The prosecutor sought to question the investigator about an allegation that he had instructed a witness not to talk to the police. The petitioner's counsel objected to the issuance of the subpoena, claiming that subpoenaing the investigator would violate attorney-client and work-product privileges and impair the petitioner's relationship with his defense team. The judge approved the request, concluding that the reason for the subpoena was a legitimate law enforcement purpose, and that the limited scope of the prosecutor's proposed inquiry would not implicate those privileges.

 

The judge stayed her order to allow the petitioner to pursue the matter through a petition in the county court. In his petition, the petitioner pressed the same claims that he had raised in the Superior Court, and added that the prosecutor and the judge had failed to comply with the requirements of rule 3.8(f). The single justice denied the petition. While recognizing that, "[a]t first blush," the case "appear[ed]" to raise important issues concerning privileges applicable to a defense attorney's investigation and what standards a judge should apply when approving a summons pursuant to rule 3.8(f)(2), the single justice concluded that "the precisely limited scope of the questioning permitted by the judge, and the purpose of that questioning" identified by the prosecutor, "obviate[d]" those concerns: "the Commonwealth does not seek to uncover privileged information or to benefit from the fruits of the defense investigation."

 

Thereafter, the investigator appeared before the grand jury but did not testify because he validly invoked his privilege against self-incrimination pursuant to the Fifth Amendment to the United States Constitution. The grand jury indicted the petitioner even without the investigator's testimony. Thereafter, the petitioner was tried and convicted of all but one charge.

 

The Commonwealth contends that because the grand jury proceedings have long since ended, the petitioner's claims have become moot. The petitioner counters that we should address the appeal anyway because of the importance of the issues raised regarding the requirements of rule 3.8(f), where a prosecutor seeks to subpoena a member of the defense team. While we may in our discretion address moot issues, we decline to do so here. Questions regarding the requirements of rule 3.8(f), while capable of repetition, will not necessarily evade review. Although the issues have been briefed, the parties no longer have a personal stake in the outcome. Moreover, the purpose for which the prosecutor sought to subpoena the investigator was particularly circumscribed, and so the case does not present issues of recurring importance to the administration of justice for which uncertainty and confusion exist. (citations omitted)

The case is In the Matter of A Grand Jury Investigation. (Mike Frisch)

Halverson re-election riddle

In Nevada, we're watching the judicial discipline hearing of Judge Elizabeth Halverson, who's been accused of, inter alia, making her bailiff give her foot rubs, falling asleep on the bench, eating with jurors during a criminal trial, and putting her husband under oath to find out if he cleaned the house. See here. My question is: assuming she gets thrown off the bench for her current term, what happens if voters re-elect her for a new term, given the power of incumbent name recognition? (posted by Nancy Rapoport)

Vicarious Liability For Legal Malpractice

A New York law firm was retained to assist the client in recovering her interest in a partnership. The firm secured a judgment against Julius Gerzof for over $1.2 million dollars. Gerzof died in Florida before the judgment had been satisfied. The firm hired Florida counsel to preserve the claim against Gerzof's estate. Florida counsel did not file a timely notice and the client "was unable to satisfy any of her judgment from the substantial assets of the estate." The client then sued the New York firm on a theory of vicarious liability for the mistake of Florida counsel.

The New York Appellate Division for the Third Judicial Department rejected the New York firm's contention that it had met its obligation to the client by retaining the Florida lawyer. While a firm is ordinarily not liable for the acts or omissions of a co-counsel outside the firm, here the New York firm solicited and hired Florida counsel without the client's knowledge. The client had no retainer agreement or contact with the Florida lawyer: "Under these circumstances, defendant assumed responsibility to plaintiff for the filing of the Florida estate claim and [the Florida lawyer] became defendant's sub-agent." Thus, summary judgment was properly denied to the New York firm. (Mike Frisch)

The Importance of Proofreading Appendices

Posted by Alan Childress

Quoting West's "Headnote of the Day" for July 9, Ray Ward and a commenter at the (new) legal writer blog observe that slapping on appendices to a filing is often hurried and harried -- yet may cause dire consequences via the old-fashioned kind of metadata:  scrawled marginal notes.  The headnote:

Conduct of Department of Justice attorney in scribbling in the margin of district judge’s opinion, submitted as appendix to Department’s brief, the word “WRONG” beside several findings of district judge was “indecorous and unprofessional conduct.” Allen v. Seidman, 881 F.2d 375 (1989).

Ray's "guess is that the attorney never intended for anyone outside the office to see those marginal notes. He or she probably wrote them while reviewing the district judge’s opinion, then put the opinion in the file."  Misproofreading at filing ensued.  Me, I'm not so sure.  The lawyer may have thought this to be pointed and aggressive adversarialositude.  Still, it is a reminder to thoughtfully review appendices and not just the brief before filing.  And yes, Ray, I realize I split an infinitive just there.

Moral:  Your appendix is a vestigial organ with no known function but it will kill you if it goes awry. (The appendix does apparently feature, however, in the debate over evolution "versus" creation.)

I still think the good-advice headnote to beat, as "KeyCite 45k[61] - Reinstatement," is:

Disbarred attorney who threatens to execute members of [Louisiana] Supreme Court and states that he has been told by two bishops that neither they nor the church would say that it would be morally wrong for him to summarily execute the Supreme Court is not entitled to reinstatement.

Hold The Applause

In a case that explores "the intersection between zealous representation and an attorney's obligation of candor to a tribunal," the New Jersey Supreme Court held the the failure of an attorney to disclose an adverse court decision (an unpublished opinion that is not considered precedent) did not violate the prohibition against false statements of fact or law. While the court disapproves of "sharp practices," the carefully worded brief that the lawyer filed was not calculated to mislead the tribunal:

If the Court were to conclude that an attorney has an affirmative duty to advise his adversary or the court of every unpublished adverse ruling against him, a system would be created in which a single adverse ruling would be the death knell to the losing advocates practice. Nor would it advantage the system of justice.

The court reached this result "with some reluctance." The issue related to an unpublished "palimony" decision that the attorney knew about because he was counsel in the case. In that case, the court had ruled that cohabitation was an element of a palimony claim. In the present matter, the attorney's client could not establish cohabitation. After this second (present) case had settled, the adverse decision was published. The other side moved to set aside the settlement on a theory of concealment of a material fact or anticipatory breach. The court here refused to grant such relief, holding that the non-disclosure "was a course of conduct the Court neither applauds nor encourages, but one our rules do not prohibit." The decision of the Appellate Division was reversed. Sanctions against the lawyer's client "cannot be condoned."

A concurrence would find that the lawyer's conduct crossed no ethical line and that he does not deserve to be "publicly castigated." (Mike Frisch)

Right To Unconflicted Counsel

The Kansas Court of Appeals held today that a trial court had abused its discretion by allowing a conflicted public defender to represent a client seeking to withdraw his guilty plea on a claim of ineffective assistance of counsel:

we are persuaded that Toney's public defender had divided loyalties at the hearing. Her purported ineffectiveness in investigating Toney's case prior to the plea was critical to her client's motion to withdraw plea. In order to faithfully and effectively represent Toney at the hearing, the public defender would be obligated to advocate and prove her own professional ineffectiveness. On the other hand, in order to defend herself against Toney's allegations of ineffectiveness, the public defender would be required to advocate against her client's legal position. This obviously placed the public defender in a tenuous position.

While Kansas has not adopted a per se rule on lawyer-client conflicts of interest:

The facts of this case do not require us to decide–and we decline to consider–whether defense counsel may properly advocate his or her own ineffectiveness and thereby avoid a claim that divided loyalties adversely affected counsel's performance.

  In the present case, Toney's public defender had an admitted concern about having a conflict of interest which resulted in her failure to present evidence and to advocate in support of Toney's motion to withdraw plea. As a consequence, her conflicted representation necessarily undermined any possibility that Toney's motion would be successful. Under these circumstances, we hold the divided loyalties of Toney's public defender adversely affected her performance as Toney's counsel and created an actual conflict of interest.

The matter was remanded for a hearing on the motion to withdraw the plea with representation by a conflict-free attorney. (Mike Frisch)

Ethics Of Name Change

An attorney who has practiced under her true name for two decades wished to legally change her name for personal reasons and retain the former name for her law practice. She has established a reputation under the present name. May she do so?

Yes, according to an ethics opinion issued by the Washington State Bar Association, so long as the use of the former name does not mislead the public:

Under the above facts, the inquiring lawyer is not prohibited from continuing to use her current name in her professional capacity after obtaining a legal name change for personal reasons, provided it does not mislead the public and further provided she releases to the WSBA, within 10 days of her name change, all information sufficient to comply with APR 13(d), as hereinafter explained.

The inquiring lawyer also asks the committee to define the phrase “avoid misleading the public” and what is meant by complying with APR 13(d), under these facts. “Misleading the public” is fact dependent, and the comment following RPC 7.1 provides some assistance. The requirements necessary to comply with APR 13(d) are set forth in the rule, but, given the lawyer’s desire to retain her current name in her professional capacity she should also inform the WSBA of this intent so it will continue to list the name under which she practices as her “public” name, while also noting her legal name in its records.

Hard for me to see how the public might be misled by the use of the former name. (Mike Frisch)

Substantially Related

The New York Court of Appeals ordered disqualification of an attorney retained to defend a police disciplinary action. The attorney had provided legal advice to the complainant in an earlier dispute between the two that the court deemed to be substantially related to the present case:

As an initial matter, those elements of the two parties' 2000/2001 interactions that are undisputed establish that some kind of attorney-client relationship existed between Lovett and Falk. The record shows that Falk sought Lovett's legal advice at least partly in a professional capacity. The record further establishes that conversations between Lovett and Falk touched on the matter of disciplining Chittenden. Lovett acknowledges that he rendered some legal advice on that issue, advising Falk to be wary of Officer Chittenden's First Amendment rights. Moreover, while disciplining Chittenden might have been a personal desire of Falk's, a request for legal advice as to whether discipline against an inferior officer is a viable course of action falls squarely within a commanding officer's professional responsibilities. Accordingly, Falk in his official capacity had an attorney-client relationship with Lovett, and therefore has standing as a prior client to bring this action for declaratory judgment.

The other prongs of DR 5-108(A) are satisfied as well. Seeking advice about a potential disciplinary case against Chittenden for insubordination in 2000/2001 is "substantially related" to actually bringing just such a case in 2003. More specifically, Chittenden's prior conduct might bear on the issue of punishment, and Falk's prior consideration of pursuing charges for insubordination might likewise be relevant. Together, these factors create a sufficient nexus between the two representations. And Falk's and Chittenden's interests are materially adverse in the disciplinary proceeding, which pits these two parties — obvious antagonists — against one another.

(Mike Frisch)

Luban On New York Prosecutor Story

When a Good Prosecutor Throws a Case

 

David Luban       

      

Should a prosecutor throw a case to avoid sending men he thinks are innocent to jail?

This story appeared in yesterday’s New York Times: a career prosecutor in New York City’s DA’s office, Daniel Bibb, was ordered to reexamine two men’s murder convictions because of new evidence. After an exhaustive 21-month investigation, Bibb became convinced that they were not guilty. But he couldn’t persuade his superiors to drop the cases, so he went in to the hearing and, in his words, threw the case. "‘I did the best I could,’ he said. ‘To lose.’"

He made sure that the exculpatory witnesses showed up at the hearing, told witnesses what questions he was going to ask them on cross-examination, and helped defense lawyers draw connections between different pieces of evidence when they weren’t getting it. All the while, he continued to ask his superiors to drop the cases. They agreed to do so for one of the men, and a new trial was ordered for the other. At that point, Bibb said, "I’m done....I wanted nothing to do with it." Bibb eventually resigned – although all he had ever wanted to be is a career prosecutor. Today he’s trying to start over as a defense lawyer.

There’s no doubt that what Bibb did was unusual. And there’s no doubt that he violated the usual role expectations of the adversary system, where lawyers never try to help the other side make their case even when they think the other side is right. But did Bibb do anything wrong?
Stephen Gillers, a nationally-renowned legal ethics expert, thinks he did, and might face professional discipline. "He’s entitled to his conscience, but his conscience does not entitle him to subvert his client’s case. It entitles him to withdraw from the case, or quit if he can’t." Bibb, on the other hand, said that he didn’t withdraw because "he worried that if he did not take the case, another prosecutor would — and possibly win."

I have great admiration for Steve Gillers, but in this case I think he's wrong. Daniel Bibb deserves a medal, not a reprimand.

Before I explain why, let’s see what the ethics case against Bibb might be. Imagine that a private lawyer representing a private client did the same thing: located truthful but adverse witnesses, revealed his cross-examination, coached the opposing lawyers. And suppose his client lost. The lawyer did it because he thought the other side was right. First, there is no question that the lawyer could be sued for malpractice. As for ethics violations, the lawyer could be charged with violating the requirement of competency (Model Rule 1.1); the requirement that the client, not the lawyer, sets the goals of the representation (Rule 1.2(a)); the requirement of diligence ("zeal," although the Model Rules don’t use that word in Rule 1.3); and the conflict of interest provision (Rule 1.7). Conceivably the lawyer could also be charged with using client confidences against the client’s interests, if any of his conduct was based on confidential information from the client. In short, a mountain of ethics violations.

Presumably, the same could be said of a prosecutor (except for the confidentiality violation); and New York’s rules contain counterparts to all these ABA rules.

But there is a difference. Prosecutors aren’t supposed to win at all costs. In a time-honored formula, their job is to seek justice, not victory. It’s a mantra that appears in all the crucial ethics documents: in the current ABA Model Rules of Professional Conduct ("A prosecutor has the responsibility of a minister of justice and not simply that of an advocate." Comment to Rule 3.8); in the previous ABA Code of Professional Responsibility ("The responsibility of a public prosecutor differs from that of the usual advocate: his duty is to seek justice, not merely to convict" (EC 7-13)); in the ABA’s Standards for the Prosecution Function ("The duty of the prosecutor is to seek justice, not merely to convict....", standard 3-1.2(c)). The ancestor of all these pronouncements is the Supreme Court’s dictum in a 1935 case, Berger v. U.S.:

The United States Attorney is the representative not of an ordinary party to a controversy, but of a sovereignty whose obligation to govern impartially is as compelling as its obligation to govern at all; and whose interest, therefore, in a criminal prosecution is not that it shall win a case, but that justice shall be done. As such, he is in a peculiar and very definite sense the servant of the law, the twofold aim of which is that guilt shall not escape or innocence suffer. Berger, 295 U.S. 78, 88 (1935).

Admittedly, there’s a Delphic quality to "seek justice, not victory." ‘Justice’ is a grandiose and vague word. (Holmes famously said "This is a court of law, young man, not a court of justice," and wrote that whenever someone starts talking about justice he knows that legal thinking has come to an end.) The actual ethics rules – as opposed to aspirational standards – take a pretty minimalist view of the prosecutor’s responsibilities. They shouldn’t proceed without probable cause, they should make a reasonable effort to ensure that the accused has been informed of his rights, they shouldn’t try to get an unrepresented person to waive rights, and they should do timely Brady disclosures. That's about it. It’s a widely recognized fact that a lot of prosecutors measure their success by their conviction rate. Fred Zacharias, a noted ethics authority, thinks that the "justice" prosecutors seek "has two fairly limited prongs: (1) prosecutors should not prosecute unless they have a good faith belief that the defendant is guilty; and, (2) prosecutors must ensure that the basic elements of the adversary system exist at trial." (That’s from his 1991 article "Structuring the Ethics of Prosecutorial Trial Practice: Can Prosecutors Do Justice?,"44 Vand. L. Rev. 45, 49.)

And yet I’ve talked with a lot of prosecutors who take "seek justice, not victory" seriously, even if they aren’t 100% confident they know exactly what it requires. At the very least, they know it means that you shouldn’t try to keep people behind bars if you think they didn't do it.

And just this year, the ABA House of Delegates agreed. The ABA added two new Model Rules to deal with prosecutors' obligations when new evidence suggests that they obtained wrongful convictions. Rule 3.8(g) requires a prosecutor who learns of "new, credible, and material evidence creating a reasonable likelihood that a convicted defendant did not commit an offense of which the defendant was convicted," to disclose the evidence to the proper authorities as well as the defendant, and initiate an investigation. And Rule 3.8(h) requires a prosecutor who receives clear and convincing evidence that a defendant was convicted of a crime he did not commit to "seek to remedy the conviction."

This rule is brand-new. It isn’t in New York's Code of Professional Responsibility yet, and it’s perfectly clear that the ABA wasn’t thinking of Bibb’s unorthodox tactics as the way a lawyer should "seek to remedy the conviction." But what, after all, did Bibb do wrong? He persuaded witnesses to show up in court and testify (against the state). Think for a moment about the alternative. Bibb was charged with investigating the case, and he did a yeoman’s job to locate the witnesses. Bibb "and two detectives conducted more than 50 interviews in more than a dozen states, ferreting out witnesses the police had somehow missed or ignored." Once he had these witnesses’ evidence, he was under an obligation to turn it over to the defense.

The alternatives: don’t investigate the case for fear you’ll find out that the guys doing 25-years-to-life are innocent; or, having investigated it, don’t turn over the exculpatory evidence to the defense, violating your constitutional and ethical obligations; or, having turned it over, put the defense to the difficulty of locating the witnesses and getting them to court – so, if they don’t succeed, the truth stays buried. THAT’s the ethical obligation of a public prosecutor?

Admittedly, it’s weirder to have the prosecutor remind the defense about how the evidence fits together, and weirder still to tell witnesses what you’re planning to ask them on cross examination. But how does that subvert criminal justice? How does that harm anybody or violate anyone's interests?

This is the real question. Steve Gillers says that Bibb subverted his client’s case. But who is his client? Bibb himself seems to think his client was Morgenthau, the DA, but that’s a misunderstanding. Prosecutors work for their boss, they don’t represent them. The court record says that a prosecutor’s client is the "people" or "state" of New York. That doesn’t help much, but it helps some. It helps us to focus on the question of why the people or state of New York have an interest in two innocent men serving long prison terms. For that matter, wouldn’t the people or state be better served if the police couldn’t close the books on the Palladium killings, given that the real killers are very likely still at large? The fact is that Bibb didn’t harm any discernible interest of his client.

And don’t think that Bibb’s conduct is totally unusual. A former federal prosecutor tells me that prosecutors often throw cases at the grand jury stage, because they think the case stinks but they’re under political pressure to take it to the grand jury. That’s less conspicuous than Bibb throwing the case at the hearing, but morally it’s hard to see the difference; and if my former prosecutor friend is right, it’s how conscientious prosecutors operate.

In the interest of full disclosure: I’ve never thought that the adversary system is the mightiest engine of truth and justice ever devised. And I’ve always thought that lawyers who shrug their shoulders at injustices they cause and say, "Don’t blame me, blame the adversary system" are ducking their moral responsibilities. Blaming the system is the weasel’s way out.

But even if I’m wrong about the adversary system in general, the prosecutor’s role is different. To "seek justice, not merely to convict" means that prosecutors aren’t supposed to be the ruthless partisan warriors the adversary system presupposes. Bibb was in a tough spot – ordered, for whatever reason, to defend convictions that he thought were wrong. He became a conscientious objector on the battlefield. His way out was unusual enough to land him on the front page of the New York Times. But he did the right thing, and hopefully THAT isn’t unusual.

         

          
Posted            5:07 PM            by David Luban [link]          
         

Thanks to David for allowing us to cross-post his views on this fascinating story. (Mike Frisch)

Real life imitates episode of Shark (well, sort of)

According to today's New York Times (here), one of Morgenthau's prosecutors says that he intentionally threw a case because he was convinced that the defendant wasn't guilty. In the recently canceled CBS series Shark, James Woods's character Sebastian Stark throws a case because he's convinced that his client IS guilty (see here). Guess what, folks? Throwing a case is unethical, even if you're convinced it's the morally correct thing to do. (Nancy Rapoport)

Lawyer Liable For Failure To Honor Assignment

The Wyoming Supreme Court has held that an attorney who is aware of an agreement to pay the client's medical bills from the proceeds of litigation is obligated to the medical provider if the medical bills are not paid from settlement proceeds. The court concludes:

Mr. Jackman [the client] clearly assigned his interest in the proceeds of his personal injury action to GemCity [the medical provider] for payment of his medical bills.  As obligor, Mr. Winship [the lawyer] was required to honor that assignment.  It is irrelevant that he had not entered into a direct contract with GemCity.  Under the well-settled law of assignments, an obligor who has notice of an assignment and fails to honor it is responsible to the assignee.  The district court, therefore, properly held Mr. Winship was responsible to GemCity for Mr. Jackman’s medical bills.

(Mike Frisch) 

"Some Realism About Bar Associations"

That is the title of a new essay by Elizabeth Chambliss (NYLS) and Bruce Green (Fordham), which is now available on SSRN.  Here is an excerpt of the abstract:

What are bar associations' responsibilities for law reform? Under what conditions do bar association committees act in the public interest? Do lawyers even believe in the 'public' interest as something that can be collectively defined?

The lawyer-statesman is a powerful icon among American lawyers. Yet many observers are skeptical that lawyers, individually or collectively, can set aside their clients' interests, political leanings, and other biases to serve as purely public-interested members of the 'governing class.' The empirical literature on bar associations likewise invites a certain amount of cynicism - or at least pessimism - about the possibility of public-interested law reform. Research shows that representative bar groups tend to be politically ineffective due to internal division. Most examples of effective bar influence involve elite, ideologically homogenous groups. ...

This Article considers the implications of this research for the role and design of bar law reform committees. ... 

[Bill Henderson]

Tx Ct Crim App denies appeal of death row inmate who alleges that judge & prosecutor slept together during case

OK, here's a first for me.  Charles Hood is set to be executed tonight because the Texas Court of Criminal Appeals has denied his appeal, which alleged that the judge and prosecutor on his case were sleeping together at the time that he was being tried.  The appeal was denied on procedural grounds.  More...

According to an email that I received, Hood's allegations were bolstered by an affidavit by

a former assistant district attorney in the Collin County District Attorney's Office . . . testifying that "[i]t was common knowledge" that Judge Holland and District Attorney O'Connell "had a romantic relationship" for several years, including at the time of Mr. Hood's trial and death sentence.

Isn't this type of situation a clear ground for recusal at trial? I'm stunned.  If you want to read my take on this, go here (the post includes a phone number for calling the person inTexas Gov. Perry's staff in charge of the Hood case).  [Nancy Rapoport]

Duty To Investigate

The South Carolina Supreme Court affirmed a sanctions award against an attorney for instituting a frivolous claim against another attorney. Attorney Malloy was retained to represent a seriously injured client through the client's elderly mother. An agreement was reached and settlement proceeds received by Malloy. The mother testified that she was thereafter unable to reach Malloy and that she "thought [he] had either kept or spent the settlement proceeds."

Mother then consulted attorney Gregory. He determined that the settlement check had been presented for payment and advised the client to file a bar grievance to "shake [the money] loose." Mother fired Malloy and hired Gregory and another lawyer. Gregory filed suit against Malloy and included a conversion claim. The suit was filed because of concern about the statute of limitations. Gregory felt that a "shoot first, ask questions later" approach was necessary.

News reports of the suit resulted in Malloy immediately tranferring the trust funds to Gregory. Malloy had held the funds as a result of unresolved third-party claims. The suit was dismissed seven weeks later. Malloy sought and won a sanction award against Gregory for filing suit without reasonable investigation, particularly with respect to the conversion claim. Gregory had not contacted Malloy or sought the file prior to filing suit. The court here concluded:

The court correctly found that, had appellant conducted a reasonable investigation, he would have known there was no basis for the conversion action.  We find it troubling that appellant was willing to speak with a news reporter and make statements that he would have known to be false if he had conducted any type of meaningful investigation.  Without a reasonable basis, appellant relied on his client’s statements that she did not know where the settlement money was to make inflammatory statements to the newspaper, i.e. accusing respondent of commingling funds and of keeping the settlement money “in his pocket” and collecting all the interest on it.

There was evidence appellant had time to investigate whether respondent had contacted Medicaid and that he could have realized much sooner that respondent was not engaging in any wrongful conduct by holding the settlement money.  In fact, the associated attorney, Barroll, had suggested to appellant that he contact respondent, but appellant refused.  Had appellant spoken with respondent and relayed Melton’s worries over the money, then the suit would have never been filed.  Under the particular facts of this case, a simple phone call may have led to an explanation by respondent as to why the money was being held.  Such a discussion between the attorneys could have prevented the grievance and suit from being filed against respondent.

We find that while an attorney or a pro se litigant does not have a duty to consult with a potential defendant prior to filing suit, before alleging conversion against an attorney for misappropriation of client funds or legal malpractice, a reasonable investigation is necessary.

A concurring opinion warns:

I concur in the result reached by the majority but am troubled by the imposition of a new duty forcing an attorney to conduct a “reasonable” investigation so as to comply with § 15-36-20.  In my opinion, this new responsibility places upon an attorney an additional requirement not currently required by statute.  I would not create a blanket rule that precludes an attorney from obtaining a reasonable belief in the merits of a case based solely on information related to him by a client.

I agree that, based on the facts of this case, appellant filed the action primarily for a purpose other than securing the proper adjudication of the claim upon which the proceedings were based.  I would affirm the lower court but see no need to impose additional duties on an attorney beyond that which is required by statute.

(Mike Frisch)

"Law Of The Streets"

The Maryland Court of Appeals reversed a criminal conviction based on its conclusion that the prosecutor made an improper closing argument. The alleged victim had offered testimony that did not inculpate the defendant; the prosecutor argued that the victim was adhering to "the law of the streets" in his testimony. The court majority provides a detailed analysis of "golden rule" closing arguments in support of its conclusion. A concurring opinion agrees with the majority's analysis of so-called "Golden Rule" arguments but would find that the prosecutor's argument here involved "permissible rhetorical flourishes" made in fair response to the defense arguments.  (Mike Frisch)

Local lawyer in Vegas does the right thing

There's a lovely article in the local Las Vegas paper about a lawyer who, after discovering that his boss had stolen $200K from her client trust accounts, repaid each and every client for the theft. (See here.) For my take on it, see here. (Nancy Rapoport)

Fifth Circuit Allows Some Sanctions Even Though Parties' Settlement 'Precluded' Them (And The Court Now Publicly Releases Oral Arguments)

Posted by Alan Childress

Here is a useful summary from yesterday's Fifth Circuit Civil News Daily Update, written by its editor Bob McKnight who allowed me to quote it in full:

Fleming & Associates v. Newby & Tittle Defendants, No. 07-20277 (5th Cir. May 30, 2008) (Smith, Prado and Ludlum (W.D. Tex.)): The district court sanctioned the plaintiffs' lawyers in connection with the filing of an amended expert witness report the day before the expert's deposition, but the parties settled their litigation before entry of an order setting a fee-based sanction. Even though the defendants expressly informed the court that the settlement precluded them from collecting on whatever sanction might be awarded, the sanction respondents were ordered to pay about $15K to the defendants. Holding: The Court vacated only the monetary component of the sanction. "[A]lthough compensatory sanctions may be bargained away by the parties, the court's right to sanction parties for misconduct remains," so mootness had not overcome all aspects of the sanctions order, and the respondents were not entitled to have it vacated entirely. On the merits, the Court readily found that the district court did not abuse its discretion in finding that the respondents' handling of the amended expert witness report was problematic under FRCP 16(f). (Appealed from S.D. Texas. [Opinion linked here.])

UPDATE:  The Civil News also reports today that the Fifth Circuit now posts [here] their actual oral arguments online (starting with late May 08 arguments), in a Windows Media format.  Even attorney names can be searched.  I would add that those preparing for argument may wish that judges' names could be searched, but the same effect is achieved with a little cross-referencing within the court's website using case names or numbers.

Ethics Alert

The California Bar's Committee on Professional Responsibility and Conduct has recently issued an ethics alert on a new limited exception to the duty to protect confidences and secrets in circumstances where the client has disclosed information about child abuse. The pertinent rule "is permissive- it creates a right to disclose, not a duty to disclose." Rule 3-1000, approved in 2004 "expressly recognize[s] an exception to the duty of California lawyers to preserve their clients' secrets":

the lawyer is faced with the dilemma of preserving clients' secrets or of disclosing the information to prevent harm to another. Until recently, the lawyer could not act to protect innocent victims without breaching the duty of confidentiality, but now Rule 3-100 permits the lawyer to disclose such information under specified circumstances. The rule and its extensive comments provide a helpful guide to lawyers faced with this dilemma.

(Mike Frisch)

Just Say No, Even To A Partner

As noted in a recent report in the ABA Journal, the profession is trending toward admission to practice on a conditional basis where there is evidence of past substance abuse, financial issues or other reasons to admit the applicant subject to a period of monitoring or supervision. The idea is that, after a period of time, the conditions would be lifted based on a reasonable assurance that the attorney is at no greater risk of an ethical lapse than any other bar member.

Arizona is a jurisdiction that may admit an attorney subject to conditions. A Hearing Officer's report in a matter involving a violation of conditions imposed notes that the attorney was required on admission to enter a four-year theraputic contract with a condition "to completely abstain from using alcohol, other drugs, or any other mood-altering chemicals, for four years." The attorney later failed a biological fluid test. In the bar proceedings, he "admitted that he drank a shot of tequila given to him by a partner in the law firm where he worked during a Christmas party, and the next day drank 2 or 3 beers at a football game." The Disciplinary Commission has recommended that the conditional admission be converted into disciplinary probation on conditions that include sobriety. (Mike Frisch)

Giving Advice Establishes Attorney-Client Relationship

The New Jersey Advisory Committee on Professional Ethics opines that a non-profit trade association cannot disclaim the formation of an attorney-client relationship with persons who call in on a hot line for legal advice from an attorney that the association compensates for her time. The result is not affected by the adoption of RPC 6.5:

Inquirer represents a nonprofit trade association that wants to set up a legal hotline, staffed by attorneys, to provide short-term, limited legal services to its members, with no expectation of continued representation in the matter. The nonprofit association would compensate the attorneys on either a flat fee annual basis or an hourly rate for the services for its members. The attorneys would be paid by the association, and no formal conflict check would be done on receipt of an inquiry from an association member. Association members would be advised in writing that no attorney-client relationship arises, and any potential conflict of interest would be waived by the member unless the attorney providing the advice knows there is a conflict.

Inquirer expresses the view that ACPE Opinion 671, 133 N.J.L.J. 1370 (April 5, 1993), 2 N.J.L. 535 (April 5, 1993), does not apply to its inquiry due to the subsequent adoption of RPC 6.5. Opinion 671 expressly provides that an attorney-client relationship ordinarily arises during one-on-one discussions between a lawyer and a person seeking legal advice, and found that an organization cannot disclaim the attorney-client relationship. Opinion 671 further noted that organizations providing legal services to its members or beneficiaries, where the attorneys providing the advice are paid, ordinarily must adhere to the provisions of RPC 7.3(e)(4) and register with the Supreme Court.

The Committee concludes that RPC 6.5 does not supersede Opinion 671 and the Opinion is, in fact, fully applicable to this inquiry.  RPC 6.5 provides that a lawyer who is participating in a program sponsored by a nonprofit organization or court by providing short-term limited legal services without an expectation of continued representation is not subject to strict application of RPC 1.7, RPC 1.9, and RPC 1.10.  Specifically, a conflict arises under these Rules only when the lawyer knows that the representation of the client involves a conflict of interest, and conflicts are imputed to the firm only when the lawyer knows that another lawyer in his or her firm would be disqualified from representing the client. RPC 6.5(a)(1) and (2).

(Mike Frisch)

More Inflammatory Closing Argument

The New Jersey Appellate Division of the Superior Court reversed a conviction in a vehicular homicide case, in part because of the inflammatory closing argument by the prosecutor. The defense had not objected, but the court found plain error. The prosecutor had referred to the defendant as "drunk" and "blotto" in the absence of evidence establishing an inference of intoxication. The arguments that the court deemed improper are quoted in the opinion. (Mike Frisch)

Mandatory Disclosure of Malpractice Insurance Closer to Rule-Reality in California

Posted by Alan Childress

Mike Frisch had an earlier post in March on the move in California toward requiring disclosure to clients as to whether there is malpractice coverage.  And HALT and the ABA tally states by their protecting clients this way, as I noted in 2006 here. 

Now Law.com, via The Recorder's Dan Levine, reports that the California bar's board of governors "voted 16-4 on Friday to finally approve new rules on coverage disclosure, an issue that's been festering there for two years. Under the compromise -- which still must be approved by the state Supreme Court -- lawyers who expect to bill a client for more than four hours must pipe up if they aren't covered for malpractice."  The governors rejected earlier versions which reached further -- such "proposals included noting a lawyer's insurance status on his or her Bar Web page."

The status of a similar proposal in Virginia [delayed] was noted by Mike here.

Conditional Bar Admission

The Louisiana Supreme Court ordered that an applicant for bar admission be conditionally admitted for a three-year period. The applicant must provide quarterly reports of his steps to establish financial responsibility throughout the period of the conditional admission. We can look for such admissions to be a trend for the future in light of the ABA's endorsement of such forms of admission, as reported in a recent article in the ABA Journal. (Mike Frisch)

Conviction Reversed As Result Of Improper Argument

The New York Appellate Division for the First Judicial Department vacated a criminal conviction for what it characterized as egregious misconduct by the prosecutor in closing argument:

A reading of the excerpted text from the People's summation clearly illustrates that [acting as an unsworn witness] was what the prosecutor did in this case, except to a more egregious degree. In this case, where two witnesses, both appearing for the prosecution, offered conflicting, contradictory statements about what had happened during the taking of photographs from the observation post, it was obviously defense counsel's duty to draw attention to the inconsistencies. Moreover, defense counsel correctly suggested that, because only one of the statements could be true, one of the witnesses was possibly committing perjury. Further, knowing that the same issue of whether Police Officer Jeselson was in a position to witness the defendant handing the codefendant drugs in exchange for money had led to a mistrial the first time around, it was entirely reasonable for defense counsel to suggest that if perjury was being committed then the police officer had more to gain from it. In turn, this placed the prosecutor at center stage, since he was one of the parties present at the photographic session.

The prosecutor did not deny this. Indeed, he responded to defendant's comments by noting that any impropriety which purportedly occurred during this incident necessarily occurred in front of him, given his presence, but that his very presence made any impropriety unlikely. He also suggested that if he were to prosecute a case, where that type of misconduct had taken place, he should be fired. Further, the prosecutor said he had no explanation for the discrepancy, other than that Badger was mistaken.

On appeal, the People concede that the prosecutor vouched for Officer Jeselson, and that there are virtually no cases in which summation remarks, like those in this case, are made by an Assistant District Attorney. Nevertheless, the People argue that the prosecutor's summation was a necessary response to "a very personal defense attack" and that the prosecutor could not just "roll over" without reply.

A dissent disagrees (as dissents usually do):

A claim of prosecutorial misconduct on account of certain statements made by the prosecutor on summation is the principal issue presented on this appeal. I would affirm as I believe the prosecutor responded in a restrained manner to a reprehensible and unsupported personal attack on his integrity by defense counsel.

(Mike Frisch)

No Conflict

The Arkansas Supreme Court has held that an attorney who serves as a prosecutor is not disqualified from representing a parent in a proceeding to change child custody when criminal charges are brought against the other parent's current spouse: "...disqualification is not required because there is not a direct conflict of interest nor is this a case of dual representation..."

The case involved a divorced husband and wife who were awarded joint custody of three minor children. The husband noticed bruises on the buttocks of one child that were later determined to have resulted from a whipping administered by the wife's live-in boyfriend. The attorney filed a petition for sole custody on behalf of the husband that was granted. The wife then married the boyfriend, who "repeatedly assaulted [her] while in the children's presence" and stabbed her with a barbeque fork.  The same attorney who had handled the custody petition was the prosecutor of the ensuing criminal battery case, which led to a motion to disqualify filed by the wife (who also divorced husband number two).

The court found no conflict and that "proper steps were taken to remove even the appearence of a conflict of interest" in that the prosecutor removed himself and his staff from the case and a special prosecutor took over. Withdrawal from both cases was not required. (Mike Frisch)

"An Intolerable Conflict Of Interest"

The New Jersey Supreme Court held today in a unanimous opinion that an attorney who had represented a juvenile charged with murder had "an intolerable conflict of interest" and thus provided ineffective assistance of counsel by failing to disclose to his client that he (the lawyer) was a defendant in a case being prosecuted by the same office that was handling the juvenile's case. The court found a per se conflict and that prejudice is presumed. There had not been disclosure and informed consent to the conflict. The attorney had been charged with criminal stalking and later was given pretrial diversion. The court states:

The stakes are high in a criminal case with the client's freedom often hanging in the balance. With so much on the line, an attorney's self-interest should never interfere with the duty of unstinting devotion to the client's cause. An attorney should never place himself in the position of serving a master other than his client or an interest in conflict with the client's interest. Surely, an attorney must never be perceived as having a reason to curry favor with the prosecutor's office at the expense of his client.

(Mike Frisch)

No Duty To Be Impartial

The Washington Court of Appeals Division I affirmed a conviction for stalking, rejecting the defendant's contention that the trial court had erred in refusing to disqualify the prosecutor's office "because one of its attorneys assisted her victim in obtaining a civil anti-harassment order." Both defendant and victim were county employees and the prosecutors office had acted in its capacity as attorney for the county in assisting the employee-victim. The court rejected the contention that the prosecutors office had violated its duty of "impartiality" under Rule 3.8, finding no such duty under the rule:

"The term 'impartial' appears nowhere in the text of or comments to
RPC 3.8. And the Washington Supreme Court has quoted a United States Supreme
Court decision to explain that prosecutors are neither expected nor required to be
completely impartial:

       The Court observed that, unlike judges, "[p]rosecutors need not be
       entirely 'neutral and detached,'" and may be rewarded for initiating and
       carrying out prosecutions in the name of the people.  As such, they "are
       necessarily permitted to be zealous in their enforcement of the law." 
       Although the constitution prevents prosecutors from making decisions that
       are "motivated by improper factors or . . . contrary to law. . . . [T]he strict
       requirements of neutrality cannot be the same for . . . prosecutors as for judges . . . ."

(Mike Frisch)

Publish or Perish: Lawyer Sanctioned With Order to Write Bar Journal Article

Posted by Alan Childress

Two weeks ago, we reported on the unusual Fifth Circuit order which required an unprepared lawyer to serve on his client a copy of the highly-critical judicial opinion.  This morning, we were forwarded, originally by someone anonymous, a copy of an April 14 order by a federal district court in Oklahoma's Western District.  The Judge found the attorney (a defense attorney representing an insurance company) to be "highly unprofessional" in his correspondence with plaintiff's two counsel.  Selections:  "Your self-serving comments are putting me to sleep."  "Can you not say anything in a page  or less?"  "You're just a broker who refers difficult cases to experienced attorneys."  "Be like a potted plant and sit quietly in the corner." 

She ordered the offending attorney "to submit to the Oklahoma Bar Journal for publication an article pertaining to civility and professionalism as they relate to adversary proceedings."  He has six months to write it.  The Judge's opinion is available in PDF:  Download 07-cv-868.pdf.  The attorney is Gerard Pignato and, thankfully, there is no mention of his law school in the opinion (but it is neither Tulane nor a Loyola).  Magazines, left, apparently make good disciplinary tools.

True, the Oklahoma Bar Journal has a proud history of publishing cutting-edge scholars -- my 1983 article on this newfangled Lexis contraption from the Mead paper company comes readily to mind.  But there is nothing in the order which makes the journal accept the submission.  Yet they might, if they give preference to repeat players.  Because it turns out, not mentioned in the opinion, that the AV-rated Mr. Pignato has (like me) already published on legal ethics in that journal.

I am pretty sure this is not how Cass Sunstein got started.

Conviction Reversed

The West Virginia Supreme Court of Appeals