Legal Profession Blog

Court Rejects Attorney's "Post Hoc Rationalization"

The Delaware Court of Chancery gets more than its share of human and corporate drama as reflected in this recent opinion.

The matter arose in the wake of the fiery death in a car accident of a 30-year-old who had recently pled guilty to a Ponzi scheme and was awaiting sentencing. 

The Los Angeles Times reported

The former head of a San Diego County hemp oil business died in a fiery car crash Sunday, just weeks before he was to be sentenced in federal court for his role in a Ponzi scheme that cost victims more than $10 million, according to coroner’s officials and court records.

Michael Llamas, 33, was driving a 2016 Lamborghini at “excessive speeds” along Harbor Drive near downtown San Diego shortly before 2 a.m. Sunday when he lost control of the vehicle, according to a statement released by the San Diego County medical examiner’s office.

The vehicle slammed into a curb, a palm tree and an “ornamental anchor” before bursting into flames, the medical examiner’s office said. Llamas was pronounced dead inside the vehicle. A female passenger was ejected from the vehicle; the extent of her injuries was not clear.

The passenger's death was confirmed by the Baltimore Sun

His passenger, a Tijuana model named Stephanie Rivera, was also drunk at the time of the crash, according to her autopsy report. She was ejected in the crash and died of her injuries two days later.

Llamas, of San Diego, founded Medical Marijuana Inc. in 2009. The firm has claimed that it may be the first in the cannabis industry to find a legal loophole allowing it to sell CBD — cannabidiol — products online and ship worldwide.

He served as CEO of the company until he stepped down in 2012 after being indicted in a mortgage fraud case. He was a month away from being sentenced when the crash happened.

Llamas was also involved in four local civil cases involving an assortment of marijuana- and hemp-related businesses.

For some, death creates opportunity

Before his death on November 5, 2017, Michael Llamas owned a 90% member interest in Stone Ash, LLC (the “Company”), and he served as one of its two managers. Defendant Stuart Titus owned the other 10% member interest and served as its other manager. When Michael died, his status as a member terminated, and the economic rights associated with his interest passed to his estate.  Michael’s status as a manager likewise terminated. Titus was left as the sole member and sole manager of the Company.

The Company owned a large block of stock in Medical Marijuana, Inc., an Oregon corporation that is a development-stage, penny-stock issuer involved in cannabis-related businesses. Its shares trade over the counter under the symbol “MJNA,” which this decision uses to refer to the issuer. Through his positions with the Company, Michael managed MJNA’s operations, despite not having any formal position with that entity.

Michael’s death left Titus in control of the Company and, through it, MJNA. Enter James Arabia, one of Michael’s advisors. After learning of Michael’s death, Arabia moved quickly to assert control over the Company. He did so by advising Titus to appoint defendants John Huemoeller and Timothy Scott as additional managers, explaining that they could support Titus and that Michael would have wanted it that way. Huemoeller and Scott are beholden to Arabia, and adding them would give Arabia control over the Company at the manager level. Moreover, under the terms of the Company’s then-operative LLC agreement (the “Original LLC Agreement”), Huemoeller and Scott could remove Titus as a manager, thereby consolidating Arabia’s control.

Titus followed Arabia’s advice. On November 7, 2017, two days after Michael’s death, Titus executed a written consent that appointed Huemoeller and Scott as additional managers (the “November 7 Consent”). Only after signing the November 7 Consent did Titus become concerned about its implications. He reached out to Stephen Silverman, a lawyer who had represented the Company. After meeting with Silverman, Titus understood that he had handed over control to Arabia. He was shocked and dismayed, and he asked Silverman to fix the problem he had created.

Meanwhile, members of the Llamas family learned about Arabia’s coup. A flurry of communications and meetings ensued. On November 13, 2017, Titus and Silverman met with the plaintiffs: Steven Llamas, Michael’s father, and Jeffrey Llamas, Michael’s brother. Titus executed a new LLC agreement for the Company (the “Amended LLC Agreement”). Among other things, it established a board of managers with a maximum of three members. In three locations, it described Titus as the sole member and manager of the Company. The description was inaccurate, because no one ever took action to remove Huemoeller or Scott.

During the same meeting, Titus executed a written consent that purported to appoint Titus, Steven, and Jeffrey as members of the board of managers (the “November 13 Consent”). But it did not first remove any of the incumbent managers. Several days later, Titus told Arabia about the Amended LLC Agreement and the November 13 Consent. Arabia convinced Titus to return to the fold. On November 20, 2017, Titus executed another LLC agreement for the Company (the “Final LLC  Agreement”). On November 21, 2017, Titus executed a written consent that purported tonremove Steven and Jeffrey and replace them with Huemoeller and Scott (the “November 21 Consent”).

In this lawsuit, Steven and Jeffrey contend that they were properly appointed as managers but never properly removed. Although they do not dispute the effectiveness of the Final LLC Agreement, they contend that the November 21 Consent is invalid along with all of the actions that the board of managers subsequently took.

In response to this lawsuit, the defendants have raised an array of arguments and defenses, one of which is dispositive. Assuming for the purposes of analysis that Titus validly adopted the Amended LLC Agreement (which the defendants otherwise contest), the defendants correctly point out that Titus never removed the incumbent managers.

This post-trial decision holds that the November 13 Consent did not appoint Steven and Jeffrey to the board of managers. Once adopted, the Amended LLC Agreement limited the size of the board to three managers. With Titus, Huemoeller, and Scott occupying those seats, there were no vacancies to fill. The November 13 Consent therefore provides no basis to challenge any actions that the managers of the Company subsequently took. Since November 7, 2017, the Company’s managers have been Titus, Huemoeller, and Scott.

The court had to sift through the mess 

All of the witnesses had some type of credibility issue, and many had several. The members of the Llamas family, the named defendants, and Arabia had personal interests in the outcome of the case and strong feelings about each other. Titus was a particularly unreliable witness who repeatedly changed his story and offered dubious interpretations of contemporaneous documents. Arabia, Huemoeller, and Scott were confident witnesses, but they had the air of confidence men. They seemed only to be telling part of the story. Steven and Jeffrey were generally credible, but they had the least first-hand knowledge about significant events, and Jeffrey had some unconvincing memory lapses. Silverman and Priscilla Vilchis, Michael’s girlfriend when he died, testified by deposition. Their accounts were mixed: Some portions seemed credible, others exaggerated, and still others undermined by conspicuous failures of memory.

After signing away control, Titus talked to the company's outside counsel

During the meeting, Silverman explained the implications of appointing Huemoeller and Scott, including that they could outvote Titus on the Executive Committee and remove him as a manager. Id. at 7–8; Titus Tr. 201–02. Until his meeting with Silverman, Titus thought that Huemoeller and Scott were serving as business advisors; he did not realize they could outvote him, much less fire him. Titus asked Silverman to “undo” what he had done and “fix it.”

Silverman agreed to look into it. After the meeting, Titus sent Silverman an email that attached a copy of the November 7 Consent. See JX 33. In the body of the email, Titus
offered a confused and unpersuasive rationalization about why he did not believe he had done anything meaningful by signing it, positing that it related to a different entity. See id. Titus also sent Silverman the Original LLC Agreement.

They met the next day

On the morning of Monday, November 13, 2017, Titus met with Silverman and Vilchis for breakfast at the Fairmont Grand Del Mar. Jeffrey joined the meeting partway through. Titus was shocked and upset that he had signed the November 7 Consent and worried about the implications of turning over control of the Company to Arabia.  The group discussed reconvening that evening at Jeffrey’s house.

After the meeting, Silverman asked a Delaware attorney for an informal reaction to Titus’s suggestion that the November 7 Consent related to a different entity. See JX 46. Not surprisingly, Titus’s rationalization did not pan out.

Silverman had a first-year associate prepare drafts of what became the Amended LLC Agreement and the November 13 Consent. JX 47; see Silverman Dep. 122. Silverman made a few changes to the draft Amended LLC Agreement; he did not make any changes to the draft November 13 Consent.

That evening, Titus, Silverman, Steven, Jeffrey, and Jeffrey’s wife, Shannon Llamas, gathered at Jeffrey’s house. Silverman brought with him an unexecuted copy of the Amended LLC Agreement and an unexecuted copy of the November 13 Consent.

After food was delivered, the group gathered around a kitchen island. Titus said he had made a “terrible mistake” by giving Arabia control. Steven Tr. 65–66. Silverman summarized the documents. He told Titus that the documents removed Huemoeller and Scott and elected Steven and Jeffrey. Id. at 67, 71; Silverman Tr. 22–33. Titus skimmed them quickly, then signed.

The Original LLC Agreement had established a manager-managed structure, vested management authority in an “Executive Committee” of “not more than five (5) members,”
and designated each member of the Executive Committee “as a Manager.” JX 10 § 5.1. The Amended LLC Agreement abandoned the language of the Executive Committee and provided instead that the “sole Member and Manager may appoint a Board of Managers” of “up to three (3) Managers.” JX 41 § 7. It described Titus as the sole member and manager. That description was only half right: Titus was the sole member, but he was not the sole manager. By executing the November 7 Consent, Titus had appointed Huemoeller and Scott as additional managers.

But the amended agreement did not protect Titus as intended

The November 13 Consent did not purport to remove Huemoeller or Scott as managers. Silverman testified that in his opinion, by reciting that Titus was the sole manager, the Amended LLC Agreement removed every manager other than Titus. As a result, he believed that Titus could fill the vacancies by executing the November 13 Consent. See Silverman Tr. 29.

In my judgment, Silverman’s opinion is a post hoc rationalization. I think the first year associate overlooked the issue of removing Huemoeller and Scott, and Silverman did not catch it. They were working quickly, and it is particularly easy to make drafting mistakes when dealing with LLCs, which often involve bespoke governing documents. If Silverman or his associate had spotted the issue, then they would have taken the easy step of providing expressly for the removal of Huemoeller and Scott. There was no need to risk having the validity of their fix turn on the prospect of an inaccurate recital having substantive effect. Silverman and his associate similarly did not spot a problem that the defendants would fixate on in this litigation, namely that the Amended LLC Agreement provided that “[i]n each Fiscal Year of the Company, all profits and losses shall be allocated to the sole Member.” JX 41 § 3. Although it was true that Titus was the sole member as a result of Michael’s death, it was not true that all profits and losses would go to him. Instead, as the holder of an assignee interest resulting from the transfer of Michael’s units by operation of law, Michael’s estate would receive its pro rata share. By adopting this provision, the Amended LLC Agreement erroneously purported to divest Michael’s estate of its economic interest in the Company, which no one intended.

Danger malpractice alert

Silverman and his associate failed to draft the documents necessary to effectuate the changes that they sought to have Titus implement. Because there were lawyers on both sides, this is not a case where evidence of intent should override the documents themselves.

Here

...there is no basis to challenge the validity of the actions taken by the managers after that date based on claims that Steven and Jeffrey became managers and were never properly removed.

The parties will confer regarding next steps in the case. If there are other outstanding issues that the court needs to address before a final order can be entered, then the parties shall submit a joint letter within fourteen days that identifies them and proposes a path to bring this case to a conclusion at the trial level. Otherwise, the parties shall submit a form of order implementing the rulings in this decision.

(Mike Frisch)

"A Lawyer's Self-Proclaimed Excellence Is Not A Mitigating Factor"

The New Mexico Supreme Court expressed its displeasure with an attorney 

In this disciplinary case the Court addresses the flagrant and intentional failure of Daniel M. Salazar (Salazar) to comply with the Rules of Appellate Procedure, among other rules and orders of this Court. This case came before the Court upon the recommendation of the Disciplinary Board (the Board) to sustain charges and impose discipline against Salazar for multiple violations of the Rules of Professional Conduct. The Board’s request centers on its conclusion that Salazar repeatedly failed to comply with certain Rules of Appellate Procedure relating to the timely filing of appellate pleadings...

The Board recommended a one-year deferred suspension of Salazar, during which time Salazar would be supervised on all appellate matters.

This Court adopted the Board’s findings and conclusions with one exception and modified the Board’s recommended discipline, indefinitely suspending Salazar for a period of no less than one year, effective thirty days from November 9, 2018.

Salazar’s history of disciplinary offenses relating to similar intentional misconduct and his refusal to acknowledge the wrongfulness of his conduct justified his prompt suspension. When Salazar failed to comply with both our order of suspension and the requirements for suspended attorneys under the Rules Governing Discipline, we held Salazar in contempt of court and increased his indefinite suspension to a period of no less than eighteen months.

He had a history

Between the two instances of prior misconduct described, Salazar violated the same four Rules of Professional Conduct at issue in these proceedings.

The court examined two incompetently-handled criminal appeals

Salazar’s practice of copying, wholesale, previous pleadings and presenting them as new documents meant to serve a new purpose further demonstrates his lack of competence.

And noted that he had practiced in violation of the court's suspension order

Two days before disciplinary counsel’s supplemental notice, Salazar filed a pleading asking to set aside and reconsider the December 19, 2018 order and decision of this Court. In that pleading, Salazar once again held himself out as a lawyer—a blatant violation of this Court’s order of November 9, 2018. He requested this Court, “by and through his attorney of record, The Law Office of Daniel M. Salazar ESQ., (Daniel M. Salazar, Esq.),” to reconsider our suspension order as he considered it “contrary to common sense and law.” Salazar argued that his successful trial record and “perceived excellence in other areas” should serve to mitigate the extent of his discipline. A lawyer’s self-proclaimed excellence is not a mitigating factor we consider when dispensing appropriate discipline for flagrant violations of the Rules of Appellate Procedure, the Rules of Professional Conduct, the Rules Governing Discipline, and perhaps most importantly, this Court’s order imposing discipline.

We strike Salazar’s motion as it was not filed by his counsel of record, but by “The Law Office of Daniel M. Salazar, ESQ.” We are deeply troubled that Salazar continues to represent himself as an attorney of record in any case, let alone his own disciplinary matter, at a time when he is indefinitely suspended from the practice of law in New Mexico. We affirm Salazar’s indefinite suspension for a period of no less than eighteen months from the effective date of his suspension as set forth in our November 9, 2018 order.

(Mike Frisch)

"The Same Type Of Systemic Negligence That Has Characterized Her Career"

The Indiana Supreme Court imposed a two-year suspension without automatic reinstatement of an attorney who neglected a number of matters

In recent years, Respondent also has been the subject of five separate show cause proceedings arising from her noncooperation with investigations by the Commission into grievances filed against Respondent. Further, while outside the record of these disciplinary proceedings, we judicially note that Respondent has been found in contempt of this Court for disobedience to our orders demanding the return of appellate records to the Clerk and, as a sanction, she has been barred from withdrawing further records in cases over which this Court has exercised jurisdiction.

The instant case – the third disciplinary prosecution against Respondent for the same type of systemic negligence that has characterized her career – makes clear that her professional shortcomings have not been remedied and in fact are growing worse. Respondent’s refusal to appear or participate in these proceedings, while already on disciplinary probation, reinforces this conclusion. The hearing officer succinctly summed up these aggravating factors and others in concluding that "Respondent cannot be safely recommended to the public as a lawyer who they can trust to handle their affairs." (HO’s Report at 26).

To protect the public, and in particular the vulnerable clientele within Respondent’s niche practice, we conclude that a lengthy period of suspension without automatic reinstatement is both necessary and appropriate. In order to gain reinstatement following the conclusion of her minimum term of suspension, Respondent will bear a heavy burden of clearly and convincingly establishing her fitness to resume practice. While  there exists very little in this record suggesting Respondent will be capable of doing so, we choose not to close that door entirely.

A number of the cases involved post-conviction relief. (Mike Frisch)

Endangering A Child And The Bar

An indefinite suspension from the Kentucky Supreme Court

On March 15, 2017, [attorney] Mac Iain was charged with endangering the welfare of a minor in Commonwealth v. Jason P. Mac Iain, 17-M-01837, in Fayette District Court. The citation stated that Mac Iain and his wife were both unconscious in their home when their minor child called 911, and narcotics and drug paraphernalia were present when the officers arrived. On August 7, 2017, Mac Iain entered a guilty plea to the misdemeanor charge and received twelve months in jail, probated for two years. On September 21, 2017, the Inquiry Commission issued a bar complaint as a result of the conviction.

A failed attempt to treat the issue

the Inquiry Commission entered a private admonition for violations of SCR 3.130(8.4)(b) and SCR 3.130(8.1)(b), conditioned on Mac Iain providing the OBC an executed Kentucky Lawyer’s Assistance Program (KYLAP) agreement within 60 days, as well as quarterly monitoring reports showing compliance with any recommendations for one year from the date of the agreement.

As of October 8, 2018, the OBC had received no proof of a KYLAP agreement or monitoring reports from Mac Iain. Due to his failure to comply with the conditions of the private admonition, the Inquiry Commission revoked the private admonition and issued a charge for violations...

A failed response

On February 22, 2019, Mac Iain left a voicemail with the OBC stating that he knew he was late in responding to the charge but would state his reasoning for the delay in an email. On February 25, 2019, he emailed the OBC regarding his failure to comply with the conditions of the private admonition and his failure to answer the charge. Mac Iain noted that he wished to “clear this up” because he planned to continue to maintain his license and practice law in Kentucky.

This order came after to failed to further respond. (Mike Frisch)

 

No Stay Of Judicial Misconduct Proceedings For Indicted Judge

The Kentucky Supreme Court rejected a judge's appeal of three motions denied by the state Judicial Conduct Commission

We recognize from the outset that the burden is upon Judge Maze to prove that her circumstances require that the JCC proceedings against her be deferred during her criminal prosecution. Unquestionably, the facts underlying the criminal prosecution appear to overlap with the facts underlying the misconduct charges against her in the JCC proceedings. So far in the criminal prosecution, Judge Maze has been indicted, arraigned on all charges, and pleaded not guilty. A pretrial conference is now set for September 17, 2019, and a trial date for November 12, 2019.

Justification for moving forward

As of now, Judge Maze has been on paid suspension from her duties as circuit judge since October 2, 2018.

The JCC’s interests in proceeding without impediment include: (1) maintaining the integrity of the state’s judicial system by the faithful discharge of its constitutional mandate to regulate the conduct of persons responsible for the administration of justice in this Commonwealth; and (2) disposing expeditiously of all pending matters before the JCC within the time constraints imposed by SCR 4.000, et seq. The JCC’s interests correspond with the public’s interest in the prompt resolution of the misconduct charges against Judge Maze. The public’s interest further demands: (1) minimizing disruption of routine court business to the citizens of the 21st Judicial Circuit and the Commonwealth; (2) reducing the additional expenditure of state funds for special judges deployed to the 21 st Judicial Circuit to continue the work of the court while Judge Maze remains suspended; and (3) reducing length of time Judge Maze receives a full judicial salary and benefits while incapable of performing any judicial duties.

Judge Maze argues that she will suffer increased difficulties because of the parallel criminal charges and disciplinary charges: (1) the quandary of asserting her Fifth Amendment right against self-incrimination and defending herself fully in both proceedings; (2) the financial strain of defending two suits; and (3) the overlap of evidence from the disciplinary proceeding allowing its use in the criminal case and vice versa. These difficulties are no greater for Judge Maze than for any judge confronting parallel disciplinary and criminal charges. And any financial burden on Judge Maze does not appear to increase if the JCC proceedings proceed without further delay.

Holding

In sum, the balance of equities in this case favors allowing the JCC to move ahead with its disciplinary proceedings. The overarching public interest in an expedited resolution of disciplinary proceedings against a sitting judge furthers the goal of maintaining the public’s trust and confidence in the judiciary while, at the same time, minimizing expense and inconvenience to the public. These interests outweigh the burden of parallel proceedings suffered by Judge Maze. Upon full review of the record, we hold that the JCC did not err in denying Maze’s motion for a stay.

Justice Keller dissented

Here, not only have criminal indictments been returned against Judge Maze, but her criminal trial has been scheduled for November of this year. A stay would therefore delay the JCC proceeding for only a few months. The brevity of this delay weighs in favor of entering the stay.

As did Justice Lambert

Because the public and the judiciary are fully protected by the temporary measures taken by the JCC and the Chief Justice, there is no compelling state interest, thus the stay pending her criminal case should be granted.

Her criminal charges, which overlap the JCC charges, are two counts of Second-Degree Forgery and one count of Tampering with Public Records. These charges are the result of her signing two orders for a drug test on her ex-husband for two different hospitals.

Justice Wright dissented on the court's jurisdiction to entertain the appeal.

WKYT reported on the criminal charges.

The judge has filed suit against the JCC and its actors in federal court.

The facts of this case, while somewhat complicated, have exposed a path which the Defendants have chosen to follow in their quest to remove Judge Beth Lewis Maze from her position as Circuit Judge for the 21st Judicial Circuit, a path which is intended to benefit others involved in a conspiracy. The conduct of the Defendants, Defendants who have acted in concert with each to violate Judge Maze’s rights, is conduct which should be rejected, conduct which should never be tolerated by a civil society, especially when individuals acting under the color of law choose to abuse their positions of trust for the sole purpose of destroying the reputation of a public servant, and to do so simply to achieve goals which the Defendants could not accomplish at the ballot box.

The facts of this case should shock the conscious of all those who believe in the integrity of the legal system. The facts of this case should for once act as a means to pull back the curtain on the secret proceedings of the Kentucky Court of Justice, Judicial Conduct Commission, and finally expose the unregulated power of those who hide behind the impenetrable curtain of the Judicial Conduct Commission. The facts of this case will finally expose the secret proceedings to the light of day and allow the public to have a voice, and more importantly, to allow those who find themselves in the crosshairs of the Judicial Conduct Commission which will permit them to avail themselves to a public trial envisioned by the Founding Fathers.

 (Mike Frisch)

Sex Crime Leads To Consent Disbarment

The Michigan Attorney Discipline Board Tri-County Hearing Panel accepted the consent disbarment of a recently-convicted attorney.

Click On Detroit reported on his arrest

 A 33-year-old Farmington Hills lawyer was arrested Wednesday on charges of raping an incapacitated woman.Daniel Carlson was arrested for third-degree criminal sexual conduct and felony obstruction of justice at a home in Farmington Hills.

Police said Carlson is accused of sexually assaulting an incapacitated woman in October 2016 and failing to comply with a court-ordered search warrant for evidence.

Lansing Legal Examiner  (Grewal Law)  on the conviction last week. (Mike Frisch)

Disrespect Or Making A Record?

The Arkansas Supreme Court affirmed a contempt in a matter where there was some prior history between counsel and the judge

...viewing the record in the light most favorable to the circuit court’s decision, substantial evidence supports the decision to hold [attorney] Streit in contempt. When the circuit court informed Streit that it would not proceed with the hearing because of the lack of a written medical record, Streit immediately questioned the judge’s integrity in open court. Streit persisted with this theory even after the circuit court explained its reasoning for the decision. The record reflects Streit interrupted the circuit court on at least three occasions during the tense exchange. The circuit court allowed Streit an opportunity to reconsider his accusation, but Streit was unwilling. We emphasize that a court’s contempt power should be used cautiously and sparingly; however, because we find substantial evidence supports the decision that Streit’s actions displayed a lack of regard for the court’s integrity and demonstrated disrespect, we affirm.

There was a dissent

Because the record does not support the majority’s decision to affirm the circuit court, I dissent from the majority opinion and would reverse and dismiss this matter. 

This appeal stems from a guardianship matter and the statutory requirements necessary for the appointment of a guardian. During a discussion between Judge Hughes and Streit regarding the statutory requirements and Streit’s attempt to preserve the record, the circuit court erroneously held Streit in contempt. 

Here, a careful review of the record demonstrates that at the commencement of the hearing, Judge Hughes immediately set the tone by pointing out deficiencies in Streit’s case.  Streit attempted to respond to Judge Hughes’s objections, but before Streit could do so, Judge Hughes instructed him that he would not place a guardianship over the individual “without having the necessary records.” Streit attempted to seek clarification from the court, but Judge Hughes interjected, stating, “Sir, you don’t need to be clear. I told you the answer.” Streit attempted to make his record, and after Judge Hughes interrupted him several times, the following dialogue ensued:

Judge Hughes:                    You can make your record, sir –

Mr. Streit:               You and I both know what this is about.

Judge Hughes:                    We do? I don’t know what it’s about.

Mr. Streit:                           This is about an appeal on which you were reversed. That’s what this is about.

Judge Hughes:                    Oh, is that what it’s about?

Mr. Streit:               Yes.

Judge Hughes:                    No, sir. Five minute recess.

After this exchange, the circuit court recessed for twelve minutes, reconvened and immediately continued to challenge Streit’s position on the guardianship requirements. The record demonstrates that when Judge Hughes returned to court, he began reciting portions of the statutes at issue. Streit again sought clarification from the court on the Judge’s previous ruling, igniting another discussion on the merits of Judge Hughes’s ruling which Streit sought to make a record. Following a drawn-out dialogue, Judge Hughes then read a portion of the Arkansas statute on contempt. He presented to Streit a summary of his impression of the events that unfolded: “You accused me of having motivation to call these requirements to your attention. . .  and I said I was doing this for something that was not related to this and was in fact I believe motivated by a prejudice towards you. Am I correct?” Streit responded affirmatively, preserving his record and maintaining his earlier position. Judge Hughes asked Streit again, “Do you wish to take that position?” to which Streit replied, “I do believe that, yes.” Judge Hughes then found Streit in contempt.  This finding is simply wrong and should be dismissed.

...the record clearly establishes that Streit attempted to make a record regarding the denial of his petition for appointment of a guardian. However, the majority fails to recognize the complexity of the multiple guardianship statutes at issue. The record demonstrates that there were several different statutes at issue. Streit, even needing clarification himself, asked Judge Hughes several times to explain his rulings so that Streit could respond.  Consequently, it was necessary to make a record as to what was occurring—a petition for appointment of a guardian to a ward with dementia—and Streit sought to obtain a ruling in the record as a potential ground for appeal.  Further, after Judge Hughes recessed and then returned, Judge Hughes himself decided to revisit the issue, not Streit. After reading aloud the statute on criminal contempt, Judge Hughes asked Streit if he still maintained his earlier position regarding his alleged bias. In doing so, he essentially backed Streit into a corner: Streit could either confirm his position that Judge Hughes’s interpretation of the guardianship statute was erroneous based on his bias even while presuming he would subsequently be charged with contempt, or answer in the negative, potentially responding with dishonesty, and failing to preserve the record for his client. 

In short, the record shows that Streit’s statements were made based on his right as counsel to make a record and not contemptuous. The crux of the issue here seems to be Judge Hughes’s reaction to his previous experiences with Streit and perceived criticism rather than Streit’s behavior.

The reference in the exchange involves a prior matter in which the attorney had represented another attorney in successfully appealing the judge's non-recusal in a matter.

We note that [attorney] Mr. Simpson has filed two complaints with the JDDC against the trial court and that the trial court has recused from Mr. Simpson’s cases in the past, citing Mr. Simpson’s “repeated attacks” against it. Considering what transpired at the Phifer hearing and the personal statements leveled at Mr. Simpson after the trial court issued its rulings in Mr. Simpson’s cases, we think the trial court’s impartiality has reasonably been questioned. While each allegation from appellant’s motion for recusal viewed in isolation may not have been sufficient, we hold that those allegations are sufficient when viewed as a whole to create what could be perceived as bias against Mr. Simpson, and by extension, Mr. Simpson’s client. Because the trial court’s impartiality was reasonably brought into question, Rule 2.11 required the trial court to recuse according to Ferguson. We hold that the trial court abused its discretion in denying appellant’s motion for recusal.

An allegation in the recusal motion

On May 16th, 2014, the Court was campaigning at a restaurant in Kensett, White County, Arkansas. In a conversation with a local gentleman who was dining at the restaurant, the Court called undersigned counsel an “arrogant prick,” and blamed him for the difficulty of his campaign.

The Arkansas Democrat Gazette reported that the judicial complaints were dismissed.

David Sachar, executive director of the Arkansas Judicial Discipline and Disability Commission, announced the commission's findings in a one-paragraph news release followed by a three-page letter to Hughes.

An investigative panel of the commission reviewed "multiple complaints" filed by three attorneys and one litigant, Sachar wrote.

"While the investigation did not reveal sufficient evidence ... to recommend action for judicial misconduct, wrongdoing or incapacity under the [Arkansas Code of Judicial Conduct]," the panel was concerned about Hughes' conduct, Sachar wrote. Judicial rules cited in Sachar's letter related to judicial fairness and courtesy.

Sachar said the panel wanted to remind Hughes "that due process of law requires notice and an opportunity to prepare a defense and to be heard."

Sachar said the panel considered Hughes' "sporadic and delayed reactions" to attorney requests that the judge recuse, or step aside, from hearing certain cases.

"The Panel recognizes the delay could be the result of staffing challenges but urges you to resolve any internal problems expeditiously," Sachar wrote.

Sachar also said Hughes should disqualify himself in any proceeding where the judge's "impartiality might reasonably be questioned."

The panel urged Hughes to evaluate similar issues "more fully in the future and exercise the appropriate protections afforded litigants and their attorneys, even if you ultimately rule in opposition to them," Sachar added.

He cautioned Hughes that the complaints were dismissed "without prejudice" and could be re-evaluated should similar complaints be filed against him in the future.

(Mike Frisch)

Alternative Service

The Law Society of British Columbia Hearing Panel has found misconduct by an attorney who did not appear and contest the allegations

As set out in more detail below, the evidence establishes that the Respondent then improperly withdrew all of the $49,000 deposited into her CIBC trust account by way of 41 trust withdrawals when she had no entitlement to the funds and when she knew that the trust funds were subject to a non-disposition order.  She did so in breach of her undertakings to transfer and hold the funds (together with the $49,000 in the WWMK Trust Account) in an interest-bearing trust account and while falsely representing to opposing counsel and her client’s new counsel that she was continuing to hold the funds in that interest-bearing trust account.  She then attempted to mislead the Law Society about her handling of the trust funds during the course of the investigation into her conduct...

 Allegation 3 of the Citation relates to the Respondent’s conduct in attempting to mislead the Law Society by creating or causing to be created 528 back-dated bills, 447 back-dated cover letters and 480 back-dated Electronic Transfer Forms and falsely representing to the Law Society that she did not operate her own trust account or have a separate accounting system and that she always billed prior to making withdrawals from trust.

Kamloops Info News reported on the charges

The Law Society of B.C. can start disciplinary proceedings against a Kamloops lawyer who has been accused of misappropriating almost $50,000 from a trust account even though they can't seem to find her to officially serve her.

The society issued a citation Feb. 2, 2018 for professional misconduct against Seanna Michelle McKinley, but according to law society documents, she told investigators she would not cooperate with an investigation into allegations she mishandled her trust account. In a published decision, law society bencher gave investigators approval to begin its proceedings by considering her served.

According to the citation, in 2014, McKinley, also known as Seanna Michelle Proulx, received $98,000 from an unnamed client, but according to court documents, she transferred almost half to a personal account.

The Law Society of B.C. citation alleges McKinley “attempted to mislead the Law Society... investigation by providing false or misleading information and records.”

The citation also alleges she "created and produced” some 528 backdated bills, 447 backdated cover letters, and 480 backdated Electronic Transfer Forms.

The Law Society says attempts to serve McKinley with an Order have been unsuccessful.

“On January 31, 2018, the Respondent informed a Law Society investigator that she would not cooperate with the Law Society by advising of a place to serve documents on her or make herself available for personal service,” a recently released court decision says.

Bencher Steven McKoen found it “impractical” to continue chasing her and approved an order of substituted service.

“I find that the evidence before me supports the conclusion that (McKinley) is willingly not making herself available to receive service, despite being informed that the Law Society has been attempting personal service,” he writes.

She practiced in Kamloops and told the law society investigator she was temporarily working at the Métis Commission for Children and Families of B.C. in Kamloops but attempts to serve here there were unsuccessful.

None of the allegations have been explored or proven before the law society disciplinary process.

(Mike Frisch)

California Sanctions Domestic Violence

An act of domestic violence merits suspension rather than disbarment, according to a recommendation of the California State Bar Court Review Department

Embroiled in a volatile intimate relationship, Imran A. Khaliq lost control one night and assaulted his girlfriend. She suffered black eyes, cuts, and other minor injuries. As a result, he faced criminal charges against him, and then this disciplinary proceeding.

A superior court judge determined that the victim’s injuries did not constitute “significant or substantial physical injury” and, therefore, concluded that there was no “great bodily injury” under Penal Code section 12022.7. Another superior court judge ultimately found Khaliq guilty of a misdemeanor violation of Penal Code section 273.5, subdivision (a) (injuring spouse, cohabitant, fiancé, boyfriend, girlfriend, or child’s parent), and sentenced him to a three-year probation with conditions, including six months in jail, which he served in the Sheriff’s Alternative Work Program.

Sanction

we find less aggravation and more mitigation than did the hearing judge. As a result, while we consider Khaliq’s misconduct to be serious and warranting the utmost concern, we disagree with the judge’s disbarment recommendation under these circumstances. Instead, we recommend a threeyear probation with conditions, including a two-year actual suspension, continuing until he provides proof of his rehabilitation and fitness to practice law.

The story

At the time of the assault that is the subject of the criminal case, Khaliq and his girlfriend, also a lawyer, had been dating for a little more than two years. Their relationship was marked by jealousy, arguing, and rough —and sometimes painful—sexual play. In addition to the current misconduct, both acknowledge that she had violently pushed, head-butted, scratched, bruised, or bit Khaliq during similar arguments on three prior occasions...

A year into his relationship with his girlfriend, Khaliq discovered that she was married and living with her husband. Jealousy arising from these prior relationships was one cause of conflict since both had just recently ended their respective relationships when Khaliq and his girlfriend started dating.

The assault

After a date on August 9, 2015 where they each consumed three glasses of wine and one and one-half glasses of beer, Khaliq and his girlfriend returned to his home where they engaged in foreplay on his couch. When she became upset that he was being too rough taking off her clothes, she refused to have sex with him. She told him that she wanted to leave and also stated that she did not want to be in the apartment where [his former girlfriend] S. W. lived. He was upset because he believed that she had participated in arousing him, and then rejected him. She got up to leave and Khaliq claims she squeezed him in the neck, kneed him in the groin, and “head-butted him,” either intentionally or inadvertently.  He became angry and upset and stated that he reacted to her kneeing him. He first slapped, then punched her in the face at least twice. After punching her, she fell to the floor and was temporarily disoriented. Khaliq’s girlfriend suffered injuries and began to bleed from Khaliq’s assault. Immediately after striking her, Khaliq stated “Look what you made me do."

Prior to the assaut, she had left him a love note that upset him as he thought it was intended to be seen by S.W.

He responded thusly

The same day the love note was posted at the front of his house, Khaliq played what he referred to as a “prank” to pay his girlfriend back for leaving the note. During a two-day period, from July 13 to 14, 2015, he sent her text messages from a work phone, and pretended to be the CEO of a company where his girlfriend had sought employment the previous month. In these messages, he attempted to schedule an interview with her, and included inappropriate and unprofessional language and requests. Khaliq’s girlfriend reported the text messages to the company’s human resources department. The company and the CEO denied sending any such texts or making inappropriate comments and, in turn, reported to the Palo Alto Police Department that someone was pretending to be the CEO. When the police contacted Khaliq, he admitted that he had sent the false messages as a “prank.” He also testified that he wanted to catch his girlfriend in a lie to see if she would choose him over the CEO because he had become “slightly jealous at that time.” The police investigated the “prank” after receiving a complaint from the human resources department. Khaliq admitted to the investigating officer that he was responsible, but explained “I was playing a prank and I’m sorry about it.” The police officer said: “People can take things the wrong way, so just be careful.” No further legal action was taken. Khaliq then spoke to his girlfriend and apologized. Thereafter, they resumed their romantic relationship.

He falsely advised his probation officer he had no priors

Twelve years before the interview with the probation officer, Y. C. Y. and Khaliq were in a relationship while students at UCLA. Y. C. Y. testified that they often got into arguments, and on one occasion, he threw plates and cups in her direction and they hit the wall behind her. But she also stated that she did not feel he was trying to hit her with these items. On another occasion, during an argument, he hit her while she was driving him to the train station, leaving a mark on her face and “tweaking” her eyeglasses. On a third occasion, when she could not reach him by telephone and was concerned about his well-being, she went to his house and climbed in through a window to check on him. She found him asleep on the couch and could not wake him. She then called a male friend who was in medical school to ask what to do. Khaliq then jumped off the couch and accused her of cheating on him. She attempted to leave and Khaliq grabbed her “neck area” and pushed her against the door. She screamed and exited the building. Police arrived, but she left the area without filing a police report. Khaliq and Y. C. Y. have not had any contact for 14 years since that incident.

The offense involved moral turpitude but the hearing officer erred in finding lack of remorse

But his overall reaction was far more sympathetic. Immediately after the episode, he attempted to help clean her face and get her to rest, and, during the two days thereafter, he reiterated his concern for her condition, his remorse for his behavior, and his affection for her.

...we disagree with the hearing judge’s finding that the “prank” was further evidence of Khaliq’s lack of insight or remorse in aggravation. First of all, it was a month before the assault. Further, since we are considering the “prank” as an act supporting the moral turpitude finding, we do not consider the same facts again as an aggravating circumstance.

Character evidence

But the hearing judge neglected to consider the character evidence presented by Khaliq’s father, mother, brothers, and sister, who all gave detailed information about Khaliq’s upbringing and his acts of honesty and charity throughout his life. They all provided declarations for his criminal case that were also admitted as good character declarations in this case. All were aware of the circumstance of Khaliq’s misconduct. Although offered by family members, any bias they may have because of their familial connection should not be disqualifying, but rather relevant to the weight given to the evidence.

Sanctions for domestic violence

We also acknowledge that prior discipline in domestic violence cases often has not reflected the changes in society and the current recognition of the seriousness of domestic violence. Many earlier cases resolved such matters with low levels of discipline, including minimal or no suspension. We agree with the hearing judge that it is important to reevaluate the appropriate discipline by considering current societal values and changing mores.

But we disagree that the facts and circumstances of this misdemeanor conviction warrant disbarment. We come to this conclusion after examining our disciplinary authority on domestic violence, our disciplinary authority on serious misconduct that is accompanied by aggravating factors, and other states’ disciplinary authority on domestic violence...

Our research has revealed only two published California cases where domestic abuse has resulted in disbarment. Notably, each resulted in a felony conviction that reflected substantially more serious misconduct than in the present matter. In one case, an attorney was convicted of first-degree murder for shooting both his wife and her lover (In re Kirchke (1976) 16 Cal.3d 902). The other case, cited by the hearing judge, involved an attorney and his wife who began having marital problems because of her extramarital affair. The couple argued, and after one episode, the attorney became physically violent, throwing his wife down on a couch and striking her repeatedly. Then, after the attorney had been drinking alcohol and using cocaine while tracking his wife’s movements at her office, he told her that he and her child were leaving her. He went home, hoping she would come after him. At home, he concealed a rifle on the bed, and continued using cocaine. When his wife arrived, they argued and he then shot her approximately 10 times with the rifle. The attorney was convicted of voluntary manslaughter (In re Nevill (1985) 39 Cal.3d 729). It is evident that the facts of these two disbarment cases differ dramatically from the facts here. Both those felony cases involved gun violence that resulted in the death of the victims.

Here, Khaliq was convicted of a misdemeanor, and his misconduct did not have such a result. In light of these differences, we distinguish these cases and find disbarment too severe.

Thus

Our disciplinary recommendation must strike a balance between today’s increasing abhorrence of domestic violence, and the laws and cases that govern our actions. Khaliq’s assault and his “prank” clearly harmed his girlfriend. Additionally, his misconduct impugns the integrity of the legal profession, undermining the public’s confidence in and respect for the legal system. We view disbarment as too severe under this case’s facts and circumstances. But in light of the nature of his violent conduct and his actions associated with the “prank” involving the CEO, we consider a lengthy actual suspension to be appropriate. We recommend that Khaliq receive a two-year actual suspension, continuing until he presents proof at a formal hearing of his rehabilitation and fitness to practice law, pursuant to standard 1.2(c)(1).

A concurring and dissenting opinion would add a year to the suspension

My concern is Khaliq’s violence coupled with his apparent ease in lying. In the practice of law, honesty is absolutely fundamental.

The Kirschke case is described in this opinion of the California Court of Appeal rejecting his habeas attack on the conviction.

the evidence at trial established Kirschke's motive and opportunity to kill. The victims were Kirschke's wife and her lover, killed on the Kirschke bed while apparently engaged in sexual activity. Kirschke had shown great, although private, resentment at the notorious nature of his wife's affair because of its potential to frustrate his efforts to secure a judicial appointment from a newly elected governor whom he had vigorously supported. An exculpatory statement of Kirschke to investigators of the crime in which he attempted to establish an alibi was proved false. Kirschke attempted to show his presence at the Los Angeles airport at a critical time by oral reference to a parking receipt containing a time stamp. Investigation showed that the receipt could not have been issued at the time stated by Kirschke.

(Mike Frisch)

Bipolar Disorder Did Not Mitigate Sanction

The California State Bar Court Review Department recommends disbarment of an attorney who had no prior discipline

In her first disciplinary case, respondent Lisa Lynn Maki is charged with misappropriating nearly $300,000 from two clients, failing to maintain or pay client trust funds, and issuing nonsufficient funds (NSF) checks from her client trust account (CTA). After the Office of Chief Trial Counsel of the State Bar (OCTC) filed charges, Maki wrote a $100,000 NSF check from her CTA to a third client. Additional charges were filed, and the cases were consolidated for trial. The hearing judge found Maki culpable of all charges and recommended disbarment.

Maki appeals, arguing that suspension, and not disbarment, is appropriate because her mental health difficulties were responsible for her misconduct. OCTC does not appeal and supports the hearing judge’s decision.

She had misused settlement proceeds in two matters despite the urgent pleas of the clients for the funds.

Maki stipulated that she was culpable of the following four violations: misappropriation involving moral turpitude in the Manghillis and Calderwood matters (counts one and five of first NDC) and issuing checks without sufficient funds involving moral turpitude (count four of first NDC and count one of second NDC). The hearing judge found her culpable of these stipulated violations, and we find that the record supports them.

Harm

Maki concedes her clients were harmed but contends that the harm was not significant enough to constitute aggravation. She argues that her clients’ emotional harm wasm attributable to the loss of employment underlying their lawsuits, that she disbursed a partial payment of $47,500 to Manghillis within five weeks of receiving the settlement funds, and that overall she paid restitution relatively quickly and with additional remuneration. These arguments fail. Maki caused harm, as previously detailed, when she failed to promptly pay her clients even though they essentially begged her for their money due to desperate financial circumstances...We find that the harm Maki caused her clients warrants substantial aggravation.

Mental health mitigation

Maki asserts that her misconduct was caused by “an extremely serious mental health crisis resulting from an unexpected adverse reaction to her prescription psychotropic medications that severely impaired her cognitive functioning.” She testified she has been treated for bipolar disorder for years and has functioned well after being prescribed medication. She described a manic episode that caused distraction, confusion, and panic during the time of her misconduct in the Caldwell and Manghillis matters (February through June 2016). She does not clearly recall handling the settlement funds, stating it was just “one big mess, one big blur.” Her doctor changed her medication, which eventually caused her to be depressed. She testified that during this depression, she did not clearly recall handling Pomerantz’s settlement funds. Thereafter, her medications were again changed, and Maki testified she was feeling better and hopeful that her depression and bipolar disorder had stabilized.

Maki’s testimony of confusion when she misappropriated funds in 2016 is not consistent with her other actions during this time. As the hearing judge noted, Maki was able to move large amounts of money into and out of her CTA. This action is inconsistent with her testimony that she was unaware of the details and management of her CTA during the relevant times. She also conducted other litigation activities and admitted to Calderwood that she “messed everything up” and was “very, very sorry.”

We further find that the expert letters Maki presented at trial were generally summary in nature and did not prove that her mental difficulties caused her misconduct.

There were a significant number of character witnesses but the evidence was discounted because they were not familiar with the misconduct.

Pro bono

We assign substantial weight in mitigation for Maki’s pro bono work and community service. Her character references detailed her ongoing commitment. She has served on the boards of various foundations and bar associations, including the Legal Aid Foundation of Los Angeles, the Clare Foundation, the Beverly Hills Bar Association, and Consumer Attorneys of California. She also served as president of Consumer Attorneys Association of Los Angeles and served on its executive committee for nine years during which she implemented mentoring and volunteer initiatives. Maki has supported several Los Angeles based charitable organizations by contributing time and financial support. She was also honored by Imagine LA as a recipient of its highest award for her commendable charitable efforts. Maki’s proven dedication to pro bono work and community service deserves substantial mitigation credit.

Nonetheless

Maki’s misconduct was surrounded by dishonesty. When her clients repeatedly asked about their settlement funds, Maki delayed payment by lying, making false assurances, and transferring small amounts of money. All the while, her CTA and general account had insufficient funds, and she knew her clients were experiencing financial and emotional difficulties.

Maki’s primary argument—that she is entitled to significant mitigation because her emotional difficulties were directly responsible for her misconduct—is not persuasive. During the four-month payment delay, Maki focused on many tasks without cognitive difficulty. For example, she accepted and deposited settlement funds, transferred them to her general account, used them to pay personal expenses, engaged in other litigation work, repeatedly made detailed excuses for non-payment to her clients, and admitted to Calderwood that she mishandled the money and had “messed everything up.” Further, Maki did not pay the full amount to both clients until they threatened involvement by the State Bar. Moreover, Maki continued to mismanage her CTA even after the first NDC was filed. This continuing misconduct causes concern, and places Maki at serious risk for future misconduct.

Law Prof's Dismissed Bias Claim Reinstated

The United States Court of Appeals for the District of Columbia Circuit reversed the grant to summary judgment against a law professor who had sued the David A. Clarke School of Law alleging racial bias in his tenure denial.

The story

In 2006, Mawakana,  a black male, was hired by the University of the District of Columbia (“University”) to serve as a law professor at the David A. Clarke School of Law (“Law School”). Pursuant to his initial employment contract, Mawakana was hired as an Assistant Professor for a three-year period. In 2009, Mawakana’s employment contract was renewed and in 2010 he was promoted to Associate Professor. In July 2011, Mawakana applied for tenure. There is no record evidence that Mawakana heard anything about his tenure application during the 2011-2012 academic year. In early fall 2012, he was invited to and attended a meeting of the faculty subcommittee assigned to review his application. At the meeting the subcommittee assured him that his application was in good shape. A short time later, however, Mawakana attended another subcommittee meeting at which the subcommittee informed him that it had some concerns about his scholarship. In November 2012, Mawakana was invited to and attended a meeting with Law School Dean Katherine “Shelley” Broderick (Broderick), and faculty subcommittee chairman, John Brittain. At the meeting they both suggested that he withdraw his tenure application. Mawakana refused. In February 2013, the subcommittee issued its assessment of Mawakana’s tenure application, concluding that his scholarship was not worthy of tenure and recommending that tenure be denied. The full faculty evaluation and tenure committee reviewed and adopted the subcommittee’s report. Broderick then reviewed and endorsed the recommendation of the full faculty evaluation and tenure committee. University Provost Ken Bain subsequently reviewed and adopted the recommendation of the full faculty evaluation and tenure committee and Broderick. Finally, University President James Earl Lyons upheld the recommendation of Provost Bain. On May 1, 2013, Mawakana received notice that he had been denied tenure and that his employment was to terminate effective August 15, 2013.

No summary judgment

A constellation of factors suggests to us that a reasonable jury viewing the evidence in the light most favorable to Mawakana could find that race was a motivating factor in the University’s decision to deny him tenure. First, there is evidence that the University, and specifically Broderick, treated certain criteria differently when assessing the scholarship of black tenure candidates as opposed to white candidates. According to the Law School’s Official Standards and Procedures for Retention and Tenure, the University considers both the number and the quality of a candidate’s published scholarly works an important criterion. But the University treated a co-authored work as inferior in assessing the application of a black candidate, Joint Appendix (JA) 1205, even though it did not do so in assessing the application of a white candidate, JA 1235–78. Likewise, Broderick treated work published in the University’s own law review as inferior in assessing the application of a black candidate, JA 1229, although the University did not so treat a white candidate’s work published in the same law review, JA 826–30. Finally, Broderick dissuaded a black candidate from applying for tenure by telling her that the University would not permit her to rely on legal briefs and memoranda as scholarship, JA 1233–34, notwithstanding the University treated these materials as qualifying scholarship in assessing the application of a white candidate, JA 1235–70.

Second, there is evidence that Broderick, who played an outsized role in the tenure review process, see Mawakana, 315 F. Supp. 3d at 205 (it is “not disputed” that a reasonable jury could believe “the recommendation of a Dean who had been running the law school for more than 15 years carried substantial weight”), disfavored Mawakana’s application. JA 1202. This history is relevant because, although Broderick was not the ultimate decisionmaker, the jury could find that her negative stance on Mawakana’s tenure application was a “proximate cause” of the University’s ultimate decision to deny him tenure...

Third, the evidence adequately supports an inference that Broderick used her influence in a manner generally more supportive of white than black tenure candidates. Broderick supported every white applicant for tenure during her time as Dean. JA 1004. Once, she lobbied so hard for a white applicant to receive tenure that another faculty member testified that she had “made [tenure] happen” for that applicant. JA 1026. On the other hand, Broderick raised concerns about more than half of the black applicants who applied for, or considered applying for, tenure, JA 1025, 1231; 1029; 1152–53; 1233–34, including Mawakana, JA 382, 1021–22, 1027–28, some before the faculty had even reviewed their applications, JA 1021–22, 1025, 1028. And at least one person involved in the tenure review process seems to have believed race played a part in some of the Dean’s decisions whether to support an applicant. Indeed, the chairman of the faculty review committee wrote in an email to another faculty member: “After losing 4 colleagues these past months, all faculty of color, . . . I am not inclined to be pressured by more of [Broderick’s] efforts to clean her house.” JA 1314.

Fourth, two members of the University faculty who were privy to the internal workings of the tenure review process testified that they believed the University had disfavored black professors within that process. JA 1036–38, 1044–45.

Fifth, of the eight white applicants who applied for tenure between the time Broderick became the Dean in 1999 and the time Mawakana filed suit in 2014, each one received tenure. JA 1004. By contrast, of the seven black professors who applied for tenure within that time period, only five received tenure. JA 48–49, 1358–59; JA 400, 1206. Those numbers may not be overly alarming until one considers that one of the five was initially denied tenure—a decision which was reversed only after her Title VII race discrimination claim survived a  motion to dismiss, see Brown, 774 F.3d at 1018; JA 49—and two other black faculty members were dissuaded from applying in the first place because Broderick told them they had no chance of succeeding, JA 1152–53, 1233.

These five factors, taken together and viewed in the light most favorable to Mawakana, raise a plausible inference that race was a motivating factor in the University’s decision to deny Mawakana tenure. At this stage, we give no opinion regarding whether Mawakana was in fact discriminated against based on his race. We simply cannot state that, as a matter of law, he was not discriminated against based on his race.

The opinion is authored by Circuit Judge Henderson joined by Circuit Judges Rogers and (former Georgetown Law Professor) Pillard.

Access to the District Court opinion is linked here. (Mike Frisch)

Bank Robbery Draws Disbarment

A felony conviction drew automatic disbarment from the New York Appellate Division for the First Judicial Department.

On April 25, 2018, in Supreme Court, New York County, respondent was convicted, upon her plea of guilty, of attempted robbery in the third degree, a class E felony, in violation of Penal Law §§ 110.00 and 160.05. Respondent admitted during the plea allocution that on August 26, 2016, at a bank in New York County, she attempted to forcibly steal property from another person. On June 13, 2018, respondent was sentenced to a conditional discharge of three years and a surcharge of $300.

The New York Post reported

A criminal defense lawyer who devoted her career to keeping her clients out of prison may herself serve a long stretch behind bars in a pair of bank robberies.

Meighan Marie McSherry once had a promising career — she was on the prestigious Hofstra Law School trial team and was quoted in a national newspaper as an expert on the law.

But that ended Thursday when the 46-year-old whip-smart Upper West Side resident was busted on charges she robbed a bank in Greenwich, Conn.

She’s also a suspect in an attempted heist at a Chase branch on Broadway at West 79th Street, in the historic Apthorp apartment building, the NYPD said.

A neighbor of McSherry, who lives in the posh Bancroft building on West 72nd Street near Central Park, said financial woes may have forced her to live a “Dr. Jekyll and Mr. Hyde” existence.

“It’s sad. She is a nice lady,” the neighbor said. McSherry was being held on $250,000 bond for allegedly robbing a Wells Fargo Bank in Greenwich on Thursday afternoon. She allegedly handed a teller a note demanding money and warning she was armed.

The heist netted an undisclosed pile of cash, but cops arrested McSherry driving soon after.

It may have been McSherry’s second heist in less than a week. Surveillance pictures taken Tuesday show a woman with a strikingly similar appearance inside the Chase Bank on the Upper West Side.

Like the Greenwich job, the suspect passed a note to a teller demanding money. The Chase teller didn’t comply, though, and the female bandit ran off.

McSherry has no memory of the Connecticut stickup, her lawyer, Jennifer De Castro Tunnard, told The Post on Friday. McSherry was being held Saturday in Niantic, Conn.

McSherry’s neighbor didn’t know if she was abusing drugs or alcohol. “But she had issues,” the neighbor said. “She always looked nervous to me.”

Among McSherry’s financial woes are lawsuits brought by her landlords seeking a total of $21,700.

McSherry claimed to the neighbor that she was taking care of her dementia-stricken mom. The resident said she didn’t know the marital status of McSherry, a former Bronx public defender.

Back in 1999, McSherry was highly regarded enough to be quoted in a USA Today report on O.J. Simpson’s work as a TV pitchman for a lawyer referral service.

“Law firms may be turned off because, by being part of the service, they run the risk of being known in their market as the ‘O.J. Simpson law firm,’ ” she told the newspaper.

(Mike Frisch)

The Forum Of Hate: Emails Draw Bar Charges

Maryland Bar Counsel has recently filed charges alleging that two attorneys engaged in misconduct in emails

Mr. Markey was admitted to the Bar of this Court on December 14, 1994. From 1995 to 2007, Mr. Markey was employed at the Board of Veterans’ Appeals (“BVA”) at the Department 0f Veterans’ Affairs (“VA”). Mr. Markey was appointed Veterans’ Law Judge for the BVA in December 2007.

Mr. Hancock was admitted to the Bar of this Court on December 15, 1988. From September 1995 to January 2016, Mr. Hancock was employed as an Attorney Advisor at the BVA at the VA.

From 2008 to 2015, Mr. Markey and Mr. Hancock, while respectively serving as Veterans' Law Judge and an Attorney-Advisor, participated in sending and receiving emails between themselves and three other BVA employees, Bernard DoMinh, John Prichard and Dennis Chiappetta.‘

The five employees referred to their email chain as the “Forum of Hate” (“FOH”) and referred to themselves as FOH members.

The five employees, including Mr. Markey and Mr. Hancock, used their official government email accounts to send and receive FOH emails.

The quoted emails begin in 2008 and involve disparaging and obscene remarks of a sexist, racist and homophobic nature, e.g., this about a hated colleague

Mr. Hancock: Not to mention despicable impersonation of human woman, who ought to her cervix yanked out of her by the Silence of the Lamb guy, and force fed to her. Whew, might be hated out. ..

Mr. Markey: Holy shit gate, Batman. Never has morale been so low, and that’s saying something.

They refer to that colleague as G-Pot

The Respondents defined G-Pot as standing for Ghetto Hippopotamus and refers to a specific BVA Chief Veterans’ Law Judge.

An email exchange concerning Hancock's son's all-white baseball team

Mr.Hancock: First baseball practice. Not Charo, Adrian, or BD in the bunch.

Mr. Markey: Nice, but where are the white sheets? Gotta start them when they are young.

Mr. Chiappetta: Come on James, that is the name of the kid’s team: “The Maryland White Sheets."

Mr. Markey: Of Course, my bad. ‘Bon fire’ after every victory.

Mr. Hancock: Nice management hate. Bout time!!

And on a photo of four BVA employees

Mr. Hancock: Who’s the chick beside Amy Crazy in the top right pic; not the terrorist.

Mr.DoMinh: Vicki Bren: BVA attorney 1995-97. actually got introduced to Markey through her.

Mr. Hancock: Like to have my pee pee introduced to her va jay jay.

Mr. Markey: No pic is much better than how she looked in person.

More

On or about December 1, 2013, Mr. Markey and Mr. Hancock participated in the following email chain mocking BVA Deputy Vice Chairman’s accent...

On or about May 20, 2014, Mr. Markey and Mr. Hancock participated in the following email chain that contained racist and homosexual slurs...

On or about August 28, 2014, Mr. Hancock participated in an email chain, stating “[t]hought of her on the train this morning when read this sentence in book I’m reading. True. Here’s the sentence: ‘you’re so fat your cunt probably turns inside out when you sit down,” regarding female Chief Veterans’ Law Judge.

The uncovering

The emails were discovered by the Veterans’ Affairs Office of Inspector General during an unrelated investigation. Mr. Markey and Mr. Hancock only stopped engaging in the FOH emails after they were confronted regarding their conduct.

The alleged rule violations

Rule 8.4. Misconduct.
It is professional misconduct for lawyer to:
(a) Violate or attempt to violate the Maryland Lawyers’ Rules 0f Professional Conduct, knowingly assist or induce another to do so, or do so through the acts of another;
(d) engage in conduct that is prejudicial to the administration of justice;
(e) knowingly manifest by words or conduct when acting in professional capacity bias or prejudice based upon race, sex, religion, national origin, disability, age, sexual orientation or socioeconomic status when such action is prejudicial to the administration of justice, provided, however, that legitimate advocacy is not violation of this paragraph.

The focus here will be on the Rule 8.4(e) charge, as the (a) allegation adds nothing substantive and the (d) charge is borderline frivolous. 

Do repulsive emails intended to be private and exchanged between like-minded persons violate Rule 8.4(e)? 

Were the accused attorneys acting in a professional capacity?

Does the fact that they were exchanged on official government accounts matter?

Keep an eye on this one.

The case is Attorney Grievance Commission of Maryland v. Markey and Hancock, Misc. Docket No. 5 (September Term 2019).

The Wall Street Journal reported on the agency action against the Forum

The Department of Veterans Affairs disciplined two judges and proposed action against three staff attorneys after an internal investigation revealed email exchanges that allegedly carried discriminatory remarks.

The five staff members at the Board of Veterans Appeals, a VA administrative court in Washington, D.C., that handles appeals over veterans’ claims, were implicated in a “pattern of inappropriate emails that were racist and sexist in tone,” VA officials said.

The department said it proposed disciplinary action against the three attorneys in January and has filed a complaint against the two judges.

The moves come as the VA has battled criticism in recent years for long backlogs and extended wait times in managing veterans’ health care and disability compensation. The latest action raises questions as to whether appeals from minority veterans received a fair hearing.

The VA said it is reviewing cases assessed by the individuals to determine if any decisions were affected. “At this time, we have no indication that any veteran’s appeal was unjustly influenced by their conduct,” the VA said in a statement.

Once received by the board, a veteran’s appeals claim is examined by an attorney, who writes it up and recommends a course of action before handing off the files to a judge. The judge reviews the case and determines whether to sign off on the decision. The Board of Appeals decided on 55,532 cases in 2014, the majority of which—95%—were related to compensation claims, according to the VA.

An investigation by the Office of the Inspector General, the VA’s watchdog, discovered the emails in September and brought the information to the VA, according to the OIG. The VA immediately removed the suspected employees from handling cases, according to the agency.

The judges involved were Dennis Chiappetta and James Markey, according to people familiar with the matter. Two of the three attorneys were Bernard DoMinh and Charles Hancock, the people familiar said. The Wall Street Journal was unable to ascertain the name of the third attorney.

Mathew Tully, an attorney for Mr. Markey, said the issue is “currently in active litigation.

“In the interest of preserving the objectivity of the administrative process that is charged with deciding this matter, we think it best to allow the legal system to bring an end to the gossip and character assassination...,” Mr. Tully said.

Mr. DoMinh didn’t respond to requests for comment. Messrs. Chiappetta and Hancock couldn’t be immediately reached.

On Jan. 15, the board’s judges held meetings with their staff to discuss the ramifications of the events, according to a person familiar with the matter. Possible responses proposed by the staffers included redoing hearings to vacating decisions, the person said.

The conduct resulted in this litigation filed in the United States District Court for the District of Connecticut in March 2018

Bias, homophobia, and sexism have no place in the Department of Veterans Affairs (VA), which is tasked with fairly adjudicating veterans’ claims for disability benefits, including those based on military sexual assault. Yet, from 2007 to late 2015, multiple senior Veterans Law Judges and attorneys at the Board of Veterans Appeals routinely exchanged bigoted messages over government email and in an online message board that they called the “Forum of Hate.” These messages—which included slurs referring to male VA employees as “butt buddies” and speculating about whether male coworkers engaged in oral sex with one another—reveal alarming homophobic attitudes by VA adjudicators. More disturbingly, such attitudes seem to reflect a widespread culture of bias within the VA, potentially leading to the unlawful denial of male survivors’ disability claims, as male survivors of sexual assault are often already disbelieved, feminized, and stereotyped as gay because of the pernicious myth that heterosexual “men don’t get raped.”

In the summer of 2017, Plaintiffs Protect Our Defenders and Connecticut Veterans Legal Center, made requests under the Freedom of Information Act to obtain records to reveal whether systemic bias within the VA has resulted in discriminatory adjudication of benefits claims, violating the rights of male veterans who experience military sexual trauma. Plaintiffs fear that the VA discriminates against male veterans due to a biased belief that male survivors are less credible and deserving of benefits than female survivors.

More than six months later, the VA has failed to disclose records about disparities in the grant and denial rates of male military sexual trauma survivors’ disability claims—data that goes to the heart of plaintiffs’ requests. The VA has also made no apparent effort to investigate the full scope of the VA’s homophobic and sexist culture, to address the root causes of bias in its adjudicatory processes, and to provide restitution to veterans victimized by its biased decision making. The VA’s failure to uncover the full scale of the bigotry within its system undermines veterans’ ability to trust that their assigned Veterans Law Judge will adjudicate their claim on the basis of the facts, not their gender. The public—and the many veterans who seek benefits for the sexual trauma they experienced during service—deserve answers as quickly as possible.

The underlying emails  are set out in this opinion on the judge's removal before the Merit Systems Protection Board.

The Board found good cause for his removal.

While there was "no evidence whether Respondent's decisions were in fact biased...the fact remains that he expressed and condoned those views ." 

The Board describes the ensuing adverse publicity and gives little weight to his claim that he was venting as a response to a "toxic work environment." (Mike Frisch)

Hate Not Great

The United States Court of Appeals for the Fourth Circuit reinstated a criminal conviction in an opinion authored by Circuit Judge Wynn joined by Circuit Judge Motz. 

Defendant James Hill, III (“Defendant”) boastfully admitted to physically and violently assaulting a coworker preparing packages for interstate sale and shipment because of the coworker’s sexual orientation. But after a jury convicted Defendant for violating the Hate Crimes Act, the district court granted Defendant’s motion for judgment of acquittal on grounds that the Hate Crimes Act, as applied to Defendant’s conduct, exceeded Congress’s authority under the Commerce Clause. Because we conclude that as applied to Defendant’s conduct, the Hate Crimes Act easily falls under Congress’s broad authority to regulate interstate commerce, we reverse and remand to the district court to reinstate the jury’s guilty verdict.

Impact on interstate commerce

At the time of the physical assault, [victim] Tibbs was pulling boxes and packaging them for interstate shipment. As a result of the assault, the packages prepared by Tibbs flew into the air and onto the ground. After the assault, Amazon closed the entire area where Tibbs and Defendant were working so that Tibbs’s blood could be cleaned off the floor. And because of the assault, Tibbs missed the rest of his shift, and his work had to be absorbed by other facility employees.

Holding

In sum, the Hate Crimes Act as applied required the Government to prove beyond a reasonable doubt that Defendant’s assault on Tibbs “interfere[d] with commercial or other economic activity in which the victim [was] engaged at the time of the conduct.” 18 U.S.C. § 249(a)(2)(B)(iv)(I). The evidence introduced by the Government at trial provided the jury with a more-than-adequate basis to make such a finding.

In establishing that Congress has the authority to proscribe Defendant’s assault of Tibbs, we simply follow the decisions of the Supreme Court and this Court regarding the constitutionality of prosecutions under the Hobbs Act and the federal arson statute. And there is no good reason to carve out a special exception to allow criminals who commit sexual orientation hate crimes under similar circumstances to avoid these well-established precedents.

Accordingly, we reverse the district court’s judgment of acquittal and remand for reinstatement of the jury’s guilty verdict.

AGEE, Circuit Judge, dissenting:

Like the majority, I believe that the proper outcome in this case naturally flows from the Supreme Court’s Commerce Clause precedent and the terms of 18 U.S.C. § 249(a)(2)(B)(iv)(I). Unlike the majority, I conclude that Congress’ power under the Commerce Clause does not permit Hill’s prosecution under that statute. This is so for two principal reasons. First, unlike the other provisions of § 249(a)(2)(B)—and, indeed, unlike “jurisdictional elements” in other statutes—§ 249(a)(2)(B)(iv)(I) does not limit the class of activities being regulated to acts that fall under Congress’ Commerce Clause power. Second, the root activity § 249(a)(2) regulated in this case—a bias-motivated punch—is not an inherently economic activity and therefore not within the scope of Congress’ Commerce Clause authority. For the reasons expounded below, I would affirm the district court’s decision to vacate Hill’s conviction and respectfully dissent.

(Mike Frisch)

Win Win

An important decision from the District of Columbia Court of Appeals approving a consent disposition in a case involving negligent misappropriation.

The petition is based on respondent’s voluntary acknowledgement that his mismanagement of his Interest on Lawyers Trust Account caused him to negligently misappropriate entrusted funds in violation of D.C. Rules of Professional Conduct 1.15(a). The proposed discipline is a six-month suspension from the practice of law, with three months stayed in favor of one year of unsupervised probation with conditions.

First, the approval signals that Disciplinary Counsel has the authority to decide (subject to the sign-off by a hearing committee) that the conduct amounted to no more than simple negligence.

There were elements of the Board on Professional Responsibility that held the view that every misappropriation had to be tried to determine whether the conduct was intentional, reckless or negligent. 

This decision (although non-precedential for sanction purposes) squarely rejects that ill-considered view.

Second, the approved sanction is, in functional effect, a three-month suspension followed by probation. 

The court uniformly imposes a suspension of no less than six months in contested cases. 

So, an accused attorney and Disciplinary Counsel can negotiate for a sanction that involves some period of suspension below the established floor. 

As I blogged earlier, this disposition is entirely reasonable, balancing the protection of the public and the integrity of the profession. It signals a new era of acceptance of consent dispositions.

If the case had gone forward on agreed facts without this consent, it would have taken five years (or more) and consumed limited resources to get an extra three months.

Oh Heart Be Still! (Mike Frisch)

Moot Court

The Rhode Island Supreme Court dismissed as moot an inactive member's contention that he should not obligated to maintain membership in the state bar association

We have carefully considered the contentions raised in Mr. Kraemer’s written memoranda and presented at oral argument. We note that, in light of the [Rhode Island Bar Association’s] recent membership revisions, Mr. Kraemer qualifies as an “Inactive/Retired” member of the RIBA and is exempt from paying membership dues. Thus, we are satisfied that Mr. Kraemer’s contentions regarding mandatory membership dues are moot. We further conclude that we are not persuaded by Mr. Kraemer’s claim that inactive members of the bar—who elect not to resign—should not be required to maintain membership in the RIBA. Mr. Kraemer has failed to provide any legal analysis to support this claim. In his memoranda to this Court, Mr. Kraemer explicitly stated that “[w]hether this Court properly mandated bar membership and dues for lawyers practicing in Rhode Island in 1973 is not raised in this petition[.]” Moreover, when questioned at oral argument as to whether he was raising a constitutional argument, Mr. Kraemer responded that he “is not making a First Amendment argument”; instead, his argument is that mandatory membership provides no benefit to inactive/retired attorneys. We, therefore, decline to reach this claim.

(Mike Frisch)

Nullification Argument Not Ineffective Assistance In Slam-Dunk Doggie Diaper Theft Case

The New York Court of Appeals affirmed an order rejecting an ineffective assistance of counsel claim grounded in the defense counsel's nullification plea

On two separate occasions, defendant unlawfully entered a multi-residential apartment building and stole the contents of packages from the mailbox area in the lobby. The items stolen were dog training pads and two pairs of pants. On both occasions, defendant’s identity as the thief of the property was captured with clarity on the building’s surveillance video. Defendant admitted to the police that he was the thief captured twice on the surveillance video and stated to his mother, on a recorded telephone call from Rikers Island, that he had been arrested for the “package thing.” By indictment, defendant was charged with two counts each of burglary in the second degree, burglary in the third degree, petit larceny, and trespass. Defendant pled not guilty and proceeded to trial.

At the outset of the trial, defense counsel declared in his opening statement that there was “no great mystery” to the case and that this was a “rock-solid” case because the crimes were captured on video. However, counsel argued that the burglary charges do not fit the facts because the evidence would show that defendant took only mail packages of pairs of pants and “doggy pee pads.” Counsel also stated that defendant did not break any locks, did not enter into anyone’s apartment, and did not possess any burglar’s tools during the incident. He told the jury that he had been “fighting for” defendant for over a year and implored the jurors to “join that fight when [they] listen to the evidence,” a comment for which a People’s objection was sustained.

The video and statements made for a compelling case so

In summation, defense counsel again commented on the sheer strength of the evidence against his client, repeatedly stating that there was no “great mystery” to the case and that he was not asking the jury to find defendant “not guilty” of the burglary charges but only to be fair. Counsel challenged the evidence of the unlawful entry into the building. He reiterated that the facts did not fit the crime because no locks were broken, no individual apartments were damaged, and defendant was armed with a sandwich (defendant can be seen eating a sandwich during the second crime) rather than any burglar’s tools. Invoking Jean Valjean of Les Misérables and his theft of bread, counsel argued that stealing “doggy diapers and a pair of pants” is not “the crime of the century” and thus could not be considered burglary. Counsel pressed for leniency for defendant along the following lines:

“This case, I submit to you, ladies and gentlemen, is overcharged. We’re talking about packages laid out in the open, not going to anyone’s apartment, packages laid out in the open on a ledge . . . The man took doggy diapers and pants.”

Counsel concluded by describing the case as an “overexaggerate[d] reality” based on the government deciding to “trump up” charges.

The court

We cannot say that, on this record when viewed in totality, defendant was provided with less than meaningful representation. Here, defense counsel was eminently familiar with the facts of the case and the evidence elicited, including the details of the surveillance video and the photographic exhibits. Given the truly overwhelming evidence against his client on all the charges, and constrained by the limited legitimate defense strategies available, counsel raised what he reasonably perceived could be factual issues in the case, such as the method of defendant’s entry into the building. Counsel’s performance included cogent opening and closing arguments, a motion to dismiss after the People’s case-in-chief, and thorough cross-examinations of the People’s witnesses. Moreover, the trial court did not curb counsel’s jury nullification summation arguments. As a result, the whole record of counsel’s performance demonstrates that defendant has failed to sustain his burden that he was deprived of meaningful representation.

(Mike Frisch)

Child Support Arrearages Preclude Reinstatement

The New York Appellate Division for the Third Judicial Department has denied reinstatement to an attorney suspended in 2014

Of greatest concern, however, is the uncontested proof in the record that respondent remains in significant arrears in overdue child support payments, with two judgments filed against him in Ulster County Family Court. Under these circumstances, we find that respondent's application for reinstatement must be denied (see generally Judiciary Law § 90 [2-a]; Rules of App Div, 3d Dept [22 NYCRR] § 806.25). We further condition any future application by respondent for reinstatement upon proof that his child support obligations have been satisfied.

(Mike Frisch)

"He Had Oral Sex And He Did [A] Bad Job On My Case."

A suspension of 18 months and until further court order has been imposed by the New York Appellate Division for the First Judicial Department

Charge 1 alleged that respondent failed to enter into a written retainer agreement in a domestic relations matter in violation of rule 1.5(d)(5). In the parties' joint stipulation of facts, respondent admitted that he failed to execute the required retainer agreement, and during the hearing, he acknowledged that he technically violated the rule, characterizing it as an oversight, since his client lived out of state. However, respondent argued that his failure was unintentional, and since it did not reflect adversely on his fitness, no sanction should be imposed.

With respect to the other charges, in July 2016, respondent was retained by Ms. A. to file a child support modification and to compel the father to sign documents to obtain passports for the minor children. Charge 2 alleged that respondent engaged in a continued pattern of sexting/texting over a period of several months with Ms. A. in violation of rule 8.4(h) (conduct that adversely reflects upon fitness as a lawyer). In the stipulation of facts and at the hearing, respondent admitted that during the representation, over a period of several months, he exchanged texts with his client which contained sexually explicit language and intimate photos. Respondent testified that he was not sure who had initiated the idea of sexting/texting and the exchange of photos, but argued that since these exchanges were consensual, although improper, they did not interfere with his representation, nor did it reflect adversely on his fitness and should not result in a suspension.

While having admitted liability as to charges 1 and 2, respondent vehemently denied liability with respect to charge 3 which alleged that after a court appearance in the child support matter, he and his client Ms. A. went to a stairwell at 111 Centre Street and engaged in physical contact of a sexual nature in violation of rules 1.8(j)(iii) (a lawyer shall not, in domestic relations matters, enter into sexual relations with a client during the course of the lawyer's representation of the client) and 8.4(h).

Ms. A. testified that her initial complaint against respondent sent to the Committee was based upon his inability to obtain a favorable result in her child support matter and his refusal to refund her retainer and, if he had satisfactorily resolved her case, she would not have complained about the texts, photographs and sexual conduct alleged. In fact, her initial complaint did not mention any claim of sexual contact on March 23, 2017 because it was "more personal," but it did refer to respondent's request for photographs of her. After she received respondent's answer to her complaint, Ms. A. submitted a reply in which she first revealed that respondent "took my money, sex chat me, collected tone (sic) of pictures of my body parts, he had oral sex and he did [a] bad job on my case." She testified that prior to her reply, the only person she told about the stairwell events was her friend.

Respondent admitted that he knew that "having sexual relations with a client...has always been frowned upon in a domestic relations matter" and that engaging in sexual relations with a client could destroy his career.

With respect to charge 2, the Referee noted that respondent admittedly engaged in a "series of sexually tinged texts with Ms. [A.] over an extended period of time and that these exchanges included intimate photographs of each other" but that respondent had also testified that, at the time, he did not think it was wrong or inappropriate. He also admitted that he responded to the complaint without reading all of the document.

The Referee found that charges 1 and 2 were undisputed in that respondent failed to provide a prior client with a written retainer for his domestic relations matter as required, in violation of rule 1.5(d)(5), and that respondent and Ms. A. engaged in a pattern of sexting/texting inappropriate messages and photos over an extended period of time during his representation of her in a domestic relations matter, in violation of rule 8.4(h).

As to charge 3, based on all the testimony and evidence, the Referee determined that Ms. A. and respondent engaged in sexual conduct - albeit brief, consensual and halted by respondent - on March 23, 2017.

In mitigation, respondent "detailed a litany of family strife that impacted him during this period of representation ....includ[ing] an acrimonious divorce, financial woes including the foreclosure on the mortgage of his home and alleged theft of funds from him and his father by his ex-wife"; he "clearly and repeatedly expressed remorse for his conduct and took responsibility for his actions with regard to...the texting of provocative language and photos" underlying charge 2; and in his 29 years of practice his disciplinary history consisted of only two prior Admonitions he received, one in 1997 for the delayed release of settlement funds and one in 1998 for the neglect of an appeal. Respondent also offered a character letter attesting to his diligence and honesty as an adversary.

The referee's findings on sanction

"A two year suspension has been deemed appropriate in cases where the improper sexual conduct of the attorney was ongoing, or clearly unwelcomed or coercive. The facts underlying Charge 3 confirm that the events of March 23, 2017 were singular, brief and halted by Respondent. And, indeed, on some level welcomed by the client. However, the admitted conduct underlying Charge 2 continued over an extended period of time.

"Both charges stem from situations that took place during the course of representation in a domestic relations matter where the Court must be particularly mindful of the need to protect clients from any improper overreaching' by counsel."

Information concerning the client's identity was sealed. (Mike Frisch)

Bad Faith Insurance Claims And Attorney-Client Privilege

The South Carolina Supreme Court punts back to the United States Court of Appeals for the Fourth Circuit

We are presented with a certified question from the United States Court of Appeals for the Fourth Circuit. The underlying case is an insurance bad faith action against an insurance company for its failure to defend its insured in a construction defect action. The insured settled the construction defect action and brought a bad faith tort action. When the insurer asserted it acted in good faith in denying coverage, the insured sought to discover the reasons why the insurer denied coverage. According to the insurer, the discovery requests included communications protected by the attorney-client relationship. The federal district court reviewed the parties' respective positions, determined the insured had established a prima facie case of bad faith, and ordered the questioned documents to be submitted to the court for an in camera inspection. The insurer then sought a writ of mandamus from the Fourth Circuit to vacate the district court's order regarding the discovery dispute. In turn, the Fourth Circuit certified the following question to this Court:

Does South Carolina law support application of the "at issue" exception to attorney-client privilege such that a party may waive the privilege by denying liability in its answer?

The parties, especially the insured, assert the certified question does not accurately represent the correct posture of the case. In fact, the insured concedes the narrow question presented requires an answer in the negative. We agree, for we find little authority for the untenable proposition that the mere denial of liability in a pleading constitutes a waiver of the attorney-client privilege. For the reasons set forth below, we elect to analyze the issue narrowly in the limited context of a bad faith action against an insurer. We are constrained to answer the certified question as follows: "No, denying liability and/or asserting good faith in the answer does not, standing alone, place the privileged communications 'at issue' in the case."

The court describes the facts of the claim

Because the certified question necessarily involves a determination of the circumstances under which a communication otherwise protected by the attorney-client privilege is discoverable under South Carolina law, we will examine the law generally and set forth the proper framework to be applied in South Carolina in a tort action by an insured against the insurer for bad faith refusal to provide coverage.

And sets out general principles of attorney-client privilege. 

With this general background, we turn to the three approaches to the waiver of the attorney-client privilege.

Bad faith claims against an insurer

This Court has not previously been tasked with harmonizing attorney-client privilege and insurance bad faith law. As the Supreme Court of Washington noted, insurance bad faith claims place in tension three valued principles: on the one side, the attorney-client privilege; and on the other side, the importance of broad discovery and holding insurance companies accountable for their bad acts. See Cedell v. Farmers Ins. Co. of Wash., 295 P.3d 239, 245–46 (Wash. 2013) (en banc). As mentioned previously, there are three broad approaches jurisdictions take to resolve this tension. Bertelsen, 796 N.W.2d at 702 n.6; Restatement (Third) of the Law Governing Lawyers § 80 Reporter's Note cmt. b. We acknowledge that none of the various approaches is without legitimate criticisms.

First, a "substantial minority" of jurisdictions have broadened the crime-fraud exception to the attorney-client privilege and found the privilege does not extend to any communications in furtherance of any crime or tort, including bad faith insurance claims. These jurisdictions have typically found the entire pre-denial claim file discoverable.

Rejected by the court as this places only "nominal value" on the privilege

Second, and on the other extreme, other jurisdictions have upheld the attorney client privilege absent direct, express reliance on a privileged communication by a client in making out his claim or defense. Such jurisdictions reject the suggestion of an implied waiver of the attorney-client privilege. We reject this approach as well, as it fails to balance the attorney-client privilege with any competing policy considerations.

The winner

Third, some jurisdictions take a middle-ground approach and find the answer depends on a case-by-case analysis of the facts. This is the general approach we adopt when determining if the attorney-client privilege has been waived in a tort action against an insurer for bad faith refusal to deny coverage.

We find the case of State Farm Mutual Automobile Insurance Co. v. Lee from the Supreme Court of Arizona instructive...

In finding the Lee framework instructive, we emphasize the sanctity of the attorney-client privilege. In this regard, a client does not waive the privilege simply by bringing or defending a lawsuit. We adopt the Lee framework in a tort action against an insurer for bad faith refusal to provide coverage, and we impose the additional requirement that the party seeking waiver of the attorney-client privilege make a prima facie showing of bad faith.

"[B]etween Scylla and Charybdis"

Insurance bad faith actions necessarily bring into conflict the competing policy considerations of protecting the attorney-client privilege and promoting broad discovery to facilitate the truth-seeking function of our justice system. In balancing these considerations, we find the Lee framework is the most consistent with South Carolina's policy of strictly construing the attorney-client privilege and requiring waiver to be "distinct and unequivocal." See Thompson, 329 S.C. at 76–77, 495 S.E.2d at 439; Doster, 276 S.C. at 651, 284 S.E.2d at 219. This case-bycase approach accounts for and fairly distributes the risks and benefits of the various competing public policies. We therefore answer the certified question from the United States Court of Appeals for the Fourth Circuit by holding that a denial of bad faith and/or the assertion of good faith in the answer does not, standing alone, place a privileged communication "at issue" in a case such that the attorney-client privilege is waived.

(Mike Frisch)