Wednesday, June 30, 2010

Disbarment Proposed For, Among Other Things, Lawyer's Battery Of His Father

The Louisiana Attorney Disciplinary Board has recommended disbarment for misconduct that included the theft by the attorney of a can of gasoline from his elderly father and battery against the father when he tried to prevent the theft. The incident led to the father having a broken finger. The attorney also conspired to commit forgery to obtain drugs. The board concluded that disbarment was appropriate even though it rejected findings that the attorney violated escrow obligations.

The board remanded findings that the attorney had committed perjury in the disciplinary matter. (Mike Frisch)

June 30, 2010 in Bar Discipline & Process | Permalink | Comments (0) | TrackBack (0)

Wisconsin Marriage Decision

The Wisconsin Supreme Court held today that a voter and taxpayer has standing to challenge an amendment that provides that marriage can only be between a man and a woman. The court set out the facts:

In November 2006, the people of Wisconsin approved the adoption of the following amendment to the Wisconsin Constitution:

Only a marriage between one man and one woman shall be valid or recognized as a marriage in this state.  A legal status identical or substantially similar to that of marriage for unmarried individuals shall not be valid or recognized in this state.

In July 2007, William McConkey, a voter and taxpayer, filed suit alleging, among other things, that this amendment (the "marriage amendment") was submitted to the people in violation of the constitution's requirement that voters must be allowed to vote separately on separate amendments (the "separate amendment rule").  In other words, McConkey claimed that the two sentences of the marriage amendment constituted two amendments, not one, and that because voters were not able to vote for or against each sentence, the marriage amendment was not validly adopted.  The Attorney General countered that McConkey did not have standing to bring this claim because he suffered no actual injury, and maintained that the amendment was adopted in conformity with the separate amendment rule.

The court held:

...the two propositions contained in the marriage amendment plainly relate to the subject of marriage.  And as the text of the amendment and context of its adoption make clear, the general purpose of the marriage amendment is to preserve the legal status of marriage in Wisconsin as between only one man and one woman.  Both propositions in the marriage amendment relate to and are connected with this purpose.  Therefore, the marriage amendment does not violate the separate amendment rule of Article XII, Section 1 of the Wisconsin Constitution.  Rather, the marriage amendment was adopted by the people of Wisconsin using the process prescribed by the constitution, and is properly now part of our constitution...

In summary, though the precise nature of McConkey's alleged injury is difficult to define, we conclude that the policy considerations underlying our standing doctrine support addressing the merits of McConkey's claim, which we therefore choose to do.

We hold that Article XIII, Section 13 of the Wisconsin Constitution——the marriage amendment——was adopted in conformity with the separate amendment rule in Article XII, Section 1 of the Wisconsin Constitution, which mandates that voters must be able to vote separately on separate amendments.  Both sentences of the marriage amendment relate to marriage and tend to effect or carry out the same general purpose of preserving the legal status of marriage in Wisconsin as between only one man and one woman.

(Mike Frisch)

June 30, 2010 in Law & Society | Permalink | Comments (0) | TrackBack (0)

No Deal

From the web page of the Ohio Supreme Court on a recent ethics opinion:

Opinion 2010-3 addresses the following question: “As part of the settlement of a legal malpractice claim, is it proper for a lawyer to require a current or former client to withdraw a disciplinary grievance or to refrain from filing a disciplinary grievance?”

The opinion cited several disciplinary cases as proof that an attempt by a lawyer to hinder the disciplinary process is improper.

“Such conduct constitutes conduct prejudicial to the administration of justice under Prof. Cond. Rule 8.4(d) and conduct adversely reflecting on fitness to practice law under Prof. Cond. Rule 8.4(h),” the opinion states.

“Further, in response to a demand for information by a disciplinary authority a lawyer is required by Prof. Cond. Rules 8.1(a) and 8.1(b) to respond truthfully and fully in the disciplinary matter including inquiry, investigation, and subsequent disciplinary proceeding. A lawyer’s attempts to avoid discipline hinder the disciplinary process.”

(Mike Frisch)

June 30, 2010 in Bar Discipline & Process | Permalink | Comments (0) | TrackBack (0)

Both Sides Now

The North Carolina Supreme Court held that a trial court did not abuse its discretion when it revoked the pro hac vice status of two attorneys in litigation against Abbott Laboratories and a hospital when a child contracted a rare form of meningitis shortly after birth. The court reversed the Court of Appeals and held "that the North Carolina Rules of Professional Conduct do not limit the trial court's discretion to revoke pro hac vice status."

Abbott moved to disqualify counsel after admission had been granted. The issue related to a contact between plaintiff's counsel and defendant's expert in a case in Kentucky. Plaintiffs put into the record the state circuit court decision in that "factually similar" case. In that case, the circuit court found that the plaintiff's attorneys had contacted and retained the expert not knowing that Abbott had already done so. Abbott was not a party to the litigation at that juncture but was a potential defendant. The court found that plaintiff's attorney deliberately failed to advise the expert that Abbott might be sued in the case. As a result, the "expert found himself on both sides in [the case]." However, the Kentucky court denied the motion to disqualify.

The court here concluded that the trial court had the inherent authority to revoke the admission. The Court of Appeals had reached a contrary conclusion by focusing on the Rules of Professional Conduct and, in particular, the choice of law provisions of Rule 8.5. The court found that Rule 8.5 applies to a bar discipline matter. The trial court found an appearance of impropriety in the contact with the expert and that the conduct was "inconsistent with fair dealings as reflected by Rule 4.3 of the Rules of Professional Conduct." Those conclusions were sufficient to invoke the trial court's inherent authority to disqualify counsel.

The court also found sufficient evidence of involvement in the expert contact to justify disqualifying both attorneys. (Mike Frisch)

June 30, 2010 in Clients, Law Firms | Permalink | Comments (0) | TrackBack (0)

Tuesday, June 29, 2010

Making Matters Worse

The Pennsylvania Supreme Court accepted a consent two-year suspension in a disciplinary matter that arose in the wake of a six-month suspension imposed in 2008. The attorney agreed that he had accepted a new matter shortly before the effective date of the first suspension. He then filed a required affidavit that falsely concealed the new matter.

The violation came to light when the new client filed a bar complaint. (Mike Frisch)

June 29, 2010 in Bar Discipline & Process | Permalink | Comments (0) | TrackBack (0)

"Obvious Disdain" Leads To Suspension With Fitness

The Illinois Review Board rejected a First Amendment defense to charges of making disparaging remarks about judicial officers and recommended a six-month suspension with reinstatement conditioned on further court order. The attorney represented a client in a custody matter. The board found that:

[Opposing] Attorney...and Judge Murphy testified that during the telephone conversation Respondent stated that he refused to appear before Judge Murphy. He yelled at Judge Murphy and said that he was a "narcissistic, maniacal, mental case, and should not be on the bench." Respondent denied that he raised his voice or that he used the phrase "mental case."

Following this incident, Judge Murphy entered an order requiring Respondent and his client to appear before him on February 21, 2008.

On February 12, 2008, Respondent sent Judge Murphy a letter stating as follows, in relevant part:

I must note further that during our telephone conference on February 8, 2008, you personally stated: "I have no problem with the matter being heard in LaSalle County." If that is correct, and no Motions are pending in Cook County, it is extremely difficult to comprehend any justification or motivation whatsoever for requiring the appearance of counsel other than the interjection of your personal vendetta in an attempt to rationalize your own mistake in summarily placing a 14 year old child with a drug and alcohol addict.

As an officer of the court, I must bluntly state that you appear to have serious mental issues involving extreme narcissism and illusions of grandiosity which effectively interferes with your ability to act as a Judge. I am certain this is the opinion of many other lawyers who are acquainted with you. I am aware of your tendency toward self-promotion and your blatant insinuation that you somehow have a superior ability to ascertain peremptorily and without the presentation of appropriate evidence the best interests of children. Do you in any manner accept the reality of the jeopardy in which you placed this child? Is it possible that you could apologize to my client, who has had custody of this child since birth and suffered weeks of sleepless nights wondering whether her child would return safely from her substance addicted and irresponsible former husband? Are you capable of self-examination, or do you simply react negatively and defensively to any suggestion that you are incapable of error?

In another matter, the board found:

Respondent and his client appeared for a hearing before Administrative Law Judge (ALJ) Judy Heineken. The hearing pertained to allegations that [his client] had sexually abused a minor foster child who was in her care.

During the hearing, Respondent stated several times that ALJ Heineken only "pretended" to be impartial because she was employed by DCFS. Among other things, he stated DCFS was an adversary to his client "and also hires and employs the hearing officer who purports to be independent, which she obviously is not since she's employed by the same agency and under the same state umbrella." He further stated to ALJ Heineken, "Obviously, you're an advocate and adversary to my position in everything that's done here with regard to rules of evidence and your own rules."

Respondent also stated on the record to ALJ Heineken, "I'd be embarrassed to have to take such jobs," and, "Obviously you need to go find a job in the private sector in the real world instead of bothering people with this kind of stuff." Respondent referred to the DCFS proceeding several times as a "kangaroo court" and "a joke" and said that "[t]his is no more a fair hearing than they had in Russia when they were operating under the Soviet system."

ALJ Heineken found that DCFS proved one of the charges against [the client] but did not prove the second charge. Respondent appealed the decision, which the appellate court affirmed. The appellate court noted that Respondent constantly badgered ALJ Heineken and showed disrespect for her and the conduct of the proceeding.

Respondent testified that, by his comments, he simply meant to challenge existing law and that he was offended by the manner in which the proceedings took place.

As to sanction:

Respondent's conduct during the proceedings below supports the Administrator's position that a suspension UFO is appropriate. While facing possible discipline for making unfounded accusations and disparaging remarks about Judge Murphy and ALJ Heineken, he continued to make similar remarks about the Hearing Panel's objectivity and qualifications. This demonstrates to us that the disciplinary process has had no deterrent effect on Respondent, and he does not intend to abide by the Rules of Professional Conduct in the future. The court has imposed suspensions UFO in similar situations. (citations omitted) We conclude that Respondent's utter lack of understanding and remorse and his obvious disdain for the disciplinary system require a recommendation of a suspension UFO.

The attorney has no record of prior discipline. (Mike Frisch)



June 29, 2010 in Bar Discipline & Process | Permalink | Comments (2) | TrackBack (0)

Sunday, June 27, 2010

Reprimand For Attempt To Embarrass

The web page of the Massachusetts Board of Bar Examiners has a summary of a recent public reprimand of an attorney for misconduct in course of civil litigation. The attorney represented the defendant. After judgment had been entered against her client and execution proceedings, there were settlement discussions. Some unflattering information surfaced concerning one of the plaintiffs. Then:

By March 2008, settlement negotiations had broken down, and the plaintiffs were prepared to go forward with the sheriff’s sale. In the interim, one of the plaintiffs brought suit against a former lover seeking to enjoin her from filing false reports with criminal authorities alleging that he had raped and sexually abused her. In defense of the lawsuit, the former lover filed an opposition to which she attached e-mails received from the plaintiff. The woman’s allegations and the e-mails were scandalous and embarrassing. On August 31, 2006, the superior court issued a permanent injunction against the woman.

On March 7, 2008, the respondent wrote to plaintiffs’ counsel that she had come across the other lawsuit involving one of the plaintiffs and that including the woman’s allegations and other information in a motion for new trial in the case against the contractor could prove to be “embarrassing.” On March 11, 2008, the respondent wrote to plaintiffs’ counsel that she hoped the plaintiffs had taken the “time to consider the implications of my most recent correspondence” in deciding whether to resolve the matter with the respondent’s client.

The respondent’s conduct in using means that had no substantial purpose other than to embarrass one of the plaintiffs into agreeing to a settlement of the matter involving the respondent’s client violated Mass. R. Prof. C. 4.4 (a lawyer shall not use means that have no substantial purpose other than to embarrass a third person) and 8.4(d) (conduct prejudicial to the administration of justice) and (h) (conduct that adversely reflects on a lawyer’s fitness to practice law.)

(Mike Frisch)

June 27, 2010 in Bar Discipline & Process | Permalink | Comments (0) | TrackBack (0)

Default Disbarment Proposed

The California Bar Journal reports proposed rule changes governing, among other things, attorneys who fail to participate in the disciplinary process:

Attorneys who do not participate in disciplinary proceedings against them could be subject to automatic disbarment under a proposal floated last month by the State Bar’s chief prosecutor. At the same time, the State Bar Court suggested a slightly different proposal that ultimately would hasten disbarment recommendations for lawyers who default. The bar board of governors sent out both proposals last month for input from interested parties.

They were part of a group of suggestions designed to streamline and simplify disciplinary procedures by both the prosecutor’s office and the court as well as to bring bar standards in line with case law. The Supreme Court has explicitly criticized the default procedure.

In his proposal, interim Chief Trial Counsel Russell Weiner wrote that disbarment would be imposed in default proceedings “unless the offense is so minimal in severity that imposing disbarment would be manifestly unjust and in those cases the discipline shall be at the high end of the applicable standard.”

Weiner also recommended separately that default should be categorized as a separate “aggravating circumstance” to be considered by a bar court judge in determining the level of discipline.

The bar court proposes to speed up disbarment in default cases rather than making it automatic. Currently, the road from default to disbarment can take many months — the bar attorney must file motions, the respondent can reply and a hearing may be held before the judge rules. Accused lawyers can go through two or three default proceedings before the hammer falls.

Under the new proposal, once the default is entered, the attorney will be placed on inactive status. If he or she does not move to set aside the default within a specified amount of time, bar lawyers can petition for disbarment.

State Bar Court Presiding Judge JoAnn Remke said the court proposes eight substantive changes that focus on two issues in addition to default — the discovery process and rules of evidence.

The court’s proposal requires a mandatory exchange of discovery modeled after the federal Rules of Civil Procedure and the process used by the Commission on Judicial Performance. The court could permit limited discovery and failure to disclose any required information would preclude its admissibility at trial.

The evidence standard would follow the Administrative Procedure Act, which allows only relevant and reliable evidence to be admitted. The standard currently is used by state agencies that oversee professional licenses, including dentists, engineers, physicians and pharmacists.

The chief prosecutor’s suggestions include adding or amending mitigating and aggravating factors, clarifications of suspension standards, and spells out the punishment for offenses involving entrusted funds or for lawyers who have sex with a client.

Although there is a so-called “three strikes” standard in discipline cases that requires disbarment on the third discipline “unless the most compelling mitigating circumstances clearly predominate.” Weiner said the courts have created four exceptions. He proposes requiring disbarment if:

  • the attorney has two discrete prior disciplines;
  • the prior discipline must have been “sufficiently serious”; and
  • the current misconduct must be serious enough to justify an actual suspension in the absence of prior discipline or there is actual harm to the client.

The recommendation also eliminates the “most compelling mitigating circumstances” escape clause.

Several board members expressed opposition or concern about a proposal to consider a lawyer’s refusal to acknowledge the wrongful nature of his or her conduct as an aggravating factor. Ventura County governor Michael Tenenbaum said an acknowledgement of wrongdoing should be a mitigating factor but the converse should not be the case.

Young lawyer representative Micha Liberty said respondents “should be able to defend themselves,” and former State Bar Court Judge Michael Marcus, now a board member representing Los Angeles, said a court should not consider it aggravating when “a person is asserting his or her rights.”

Weiner explained that mitigation and aggravation are considered only after an attorney has been found culpable of wrongdoing and an “unreasonable insistence” that a lawyer has done nothing wrong could trigger an aggravating factor. “It’s very important,” he said, “that they give some recognition that what they did is wrong.”

(Mike Frisch)

June 27, 2010 in Bar Discipline & Process | Permalink | Comments (0) | TrackBack (0)

Friday, June 25, 2010

No Malpractice

The New York Appellate Division for the First Judicial Department affirmed the dismissal of a legal malpractice claim against Chadbourne & Parke LLP:

Plaintiffs, Creditanstalt Investment Bank AG and its affiliates (collectively, CAIB), allege that, due to Chadbourne's negligent failure to warn them in 1998 of possible criminal consequences of their use of a simple partnership structure (SP Structure) to invest in the Russian natural gas company, Gazprom, they continued using that investment structure, until, in 1999, their Russian offices were raided by Russian tax police. The Russian tax authorities then engaged in a prolonged investigation, allegedly focused on the legality of the structure of the investments. As a result of the threat of criminal prosecutions, CAIB chose in early 2000 to cease all business in Russia until the six-year statute of limitations had run, and then to acquire another corporation in order to re-establish its presence there.

The complaint alleges that the SP Structure was illegal under Russian law, specifically Decree No. 529, and that the Russian tax police undertook an investigation because the SP Structure was illegal. However, the contention that the SP Structure was illegal under Russian law was rejected in an arbitration brought against plaintiff CIS Emerging Find Limited (CISEF) in which CISEF asserted that its contract with the claimant was void because it was part of the SP Structure that was illegal under Decree No. 529. Since the issue was actually and necessarily decided in the arbitration, in which CISEF had a full and fair opportunity to litigate the issue, CISEF and the other plaintiffs, who are admittedly in privity with it, are precluded from relitigating it herein...Thus, to the extent the complaint is based on allegations that Chadbourne negligently advised plaintiffs that the SP Structure was legal, although risky, under Russian law, the malpractice claim is foreclosed.

Summary judgment dismissing the entire legal malpractice action was correctly granted because CAIB failed to present evidence in admissible form sufficient to raise a triable issue of fact as to proximate cause, which requires a showing that Chadbourne's alleged failure to warn it of potential criminal consequences of its use of the SP Structure proximately caused reasonably ascertainable damages...CAIB submitted no admissible evidence to dispute Chadbourne's showing that the 1999 tax police raid was precipitated by a terminated employee in an effort to delay CAIB's discovery of his theft of 100,000,000 shares of Gazprom stock. Further, the shares of Gazprom stock that were "arrested" by Russian authorities following the 1999 raids were eventually released to CAIB, and no formal criminal prosecution was ever commenced against CAIB or any of its affiliates or officers. CAIB's claim that, had Chadbourne properly advised it of potential criminal exposure, it would have changed or ceased its use of the SP Structure and then would have been able to maintain its presence in Russia and grow its business there over the next six years, while the Russian economy rebounded, is too speculative to support a legal malpractice claim.

(Mike Frisch)

June 25, 2010 | Permalink | Comments (0) | TrackBack (0)

Unethical To Buy The Farm

The Wisconsin Supreme Court affirmed the rescission of a real estate contract between an attorney and his clients in a chapter 13 bankruptcy. The court did not accept the attorney's "defense" that he had been suspnded prior to the sale:

Trewin [the attorney] maintains that the elements are not met because nothing he did while he had an attorney-client relationship with the Grosheks constituted a breach of fiduciary duty, and because such a duty no longer existed at the time he purchased the Grosheks' land because the attorney-client relationship ceased when his law license was suspended on August 31, 2004.  Specifically, he argues that an attorney has no fiduciary duty to former clients, and at the time of the property sale, the Grosheks were former clients.  Because the bankruptcy filing made the Grosheks' financial distress a matter of public knowledge, Trewin argues that there is no basis for concluding that he used confidential information gained as the Grosheks' counsel in negotiating the purchase.  He further argues that there was no injury to the Grosheks because the underlying cause of the sale of their land——their financial difficulties——did not result from his actions; in other words, they would have lost the farm whether he bought it or not.  As for the documents signed by the Grosheks on August 30, 2004, Trewin argues that they imposed no legal obligation on the Grosheks and that he never sought to enforce them; therefore, they cannot serve as the basis for a finding of breach of fiduciary duty.

The clients contended:

The Grosheks argue that Trewin remained their attorney and thus retained a fiduciary duty to them well beyond August 31, 2004, the date upon which his law license was suspended.  They point to subsequent bills for legal services and the language of the waiver of conflict of interest, which they construe as implying that the attorney-client relationship would be ongoing and would be affected in the future only if they failed to make lease payments.  They alternatively argue that agency law and rules of professional conduct impose an obligation on Trewin not to use information against a former client, and that those principles support a finding that Trewin had a continuing fiduciary duty to the Grosheks even if the attorney-client relationship had ended.  Additionally, they argue that the information Trewin used did indeed include confidential information about the Grosheks far beyond what would have been publicly disclosed in bankruptcy filings, such as their neighbors' interest in purchasing part of the property, their own understanding of related tax liabilities, and other factors that ultimately played a role in the sale of the land.

The court majority concluded that punitive damages were not available. Chief Justice Abrahamson disagreed:

I conclude that the failure to recover compensatory damages——actual, presumed, nominal, or otherwise——has no logical bearing on the propriety of a punitive award.  The suitability of a punitive damage award should be determined by the usual rule, evaluating the nature of the wrongdoer's conduct.  The economic magnitude of the wrongdoing may or may not be properly represented by an award of compensatory damages and the absence of such an award should not raise a categorical bar to punitive damages if the conduct otherwise warrants them.

(Mike Frisch)

June 25, 2010 in Clients | Permalink | Comments (1) | TrackBack (0)

Thursday, June 24, 2010

"Laptop Incident"

The Florida Supreme Court rejected a referee's proposed discipline of at least a two-year suspension in favor of a sixty day suspension and two years probation. The attorney had no prior discipline. During the course of a five day deposition, a three minute incident took place that was the basis for discipline. The primary evidence in the case was video of all five days.

The so-called "laptop incident" was sparked when opposing counsel sought to place an exhibit sticker on the attorney's laptop. Things got ugly, leading the attorney own consultant to advise him to "take a Xanax." The deponent was frightened. The court reporter exclaimed "I can't work like this."

The court concluded that lesser discipline of a suspension with automatic reinstatement was appropriate but let the attorney know that his behavior was an embarrassment to the entire Florida Bar. (Mike Frisch)

June 24, 2010 in Bar Discipline & Process | Permalink | Comments (0) | TrackBack (0)

Camille Nelson Appointed Dean of Suffolk University Law School

Posted by Jeff Lipshaw

Camille Nelson is our new dean.  Here's President David Sargent's message to the law school community:

Suffollkdean-thumb-200x300-14402 I am pleased to announce the appointment of distinguished legal scholar Camille A. Nelson as the 12th dean of Suffolk University Law School. She will come to us Sept. 1 from Hofstra University School of Law, where she has been a professor of law.
Professor Nelson joins us in sharing a longstanding conviction that the potential for excellence is unlocked when doors are opened to people of ability from all backgrounds and circumstances, and I am confident that she will continue Suffolk University Law School’s mission of opportunity.
She is committed to public service and the pursuit of social justice, and we expect that the Law School will flourish through her energy, collaborative leadership style, and vision.
Her appointment follows a nationwide search and strong faculty support.
Since September 2009, Nelson has been a faculty member and Professor of Law at Hofstra University School of Law, where courses she taught included Comparative Criminal Law and Transnational Law.  Before joining Hofstra, she served as a visiting professor at Washington University in Saint Louis School of Law, where she became the Dean’s Distinguished Scholar in Residence. From 2000 to 2009, she was a Professor of Law at Saint Louis University School of Law, where she taught Contracts, Criminal Law, Critical Race Theory, Legal Profession, and Sports Law Ethics.
Following her undergraduate education at the University of Toronto, Nelson received her law degree from the University of Ottawa Faculty of Law and went on to receive a Master of Laws from Columbia Law School in New York. She clerked for Justice Frank Iacobucci of the Supreme Court of Canada and then worked as an associate at McCarthy Tetrault in Toronto, the largest law firm in Canada.
Nelson is widely recognized for her writings and lectures, which have focused on the intersection of critical race theory and cultural studies. Her writings are respected for both their insights and creativity. Nelson has published nearly two dozen journal and law review articles, including articles in the Iowa Law Review, the Yale Journal of Law & Feminism, the Southern California Interdisciplinary Law Journal, the University of Florida Journal of Law and Public Policy, and the Wisconsin Law Review.
As a gifted teacher, Nelson was named Faculty Member of the Year at Saint Louis University School of Law in 2004. In 2006, she received the university-wide Faculty Excellence Award from Saint Louis University. Nelson was honored with an Extraordinary Service Award from the National People of Color Legal Scholarship Conference at George Washington University School of Law in 2004. In 2005, she received the Derrick A. Bell Jr. Faculty Award from the Association of American Law Schools, Section on Minority Groups, for her activism, mentoring, colleagueship, teaching, and scholarship. In 2010 she was elected to the American Law Institute.
I look forward to your joining me in welcoming her as she joins the Suffolk community in September.
David J. Sargent

June 24, 2010 in Teaching & Curriculum | Permalink | Comments (0) | TrackBack (0)

In-House Whistleblower Claims Dismissed

A plurality of the Minnesota Supreme Court held that the former (and fired) in-house general counsel for Sybaritic, Inc. had failed to establish a whistleblower claim that he had been terminated from his position based on his advice that the client was illegally withholding discovery in litigation. The court held that the statute does not contain a job duties exception to bar an employee who reports suspected illegality as part of job duties from bringing a claim. The job duties of the reporting employee are relevant to determining good faith in the reporting.

Sybaritic is a company that sell that manufactures and sells equipment and spa products for spa and medical-spa industries.The in-house counsel sent around an e-mail entitled "A Difficult Duty" that expressed concern about a "pervasive culture of dishonesty" in the company and specific concerns about the conduct of an ongoing  matter in Estonia. The e-mail concluded by stating that he had a "firm conviction" that the company:

intends to continue to engage in tax evasion, the unauthorized practice of medicine and obstruction of is my intention to advise the appropriate authorities of these facts. I do this with no ill will. To the contrary, I wish that I was not obliged to do so. However, the demand of Sybaritic that I become attorney of record in the [intellectual property action] has made it impossible to ignore the obstruction of justice issue, and compels me to speak out about the tax evasion and unauthorized practice of medicine issues which the company has refused to address. I regret I se no other course of action available.

The company changed his supervisor the day after the e-mail was sent and fired him three weeks later. The parties at trial presented conflicting evidence concerning the reasons that in-house counsel had been fired. The company found he had copied his father on the e-mail and felt it could "no longer trust [him] as general counsel." He claimed that the reasons for discharge were pretextual. The jury sided with him and awarded $197,000 in damages. That award was overturned by the Court of Appeals.

 The court plurality here rejected the lower court's legal conclusion that a broad "job duties" exception barred the suit. However, the plurality concluded that the evidence established that the e-mail was sent as part of counsel's job duties, which precluded a whistleblower action:

When in-house counsel sends his client written advice in order to "pull" that client "back into compliance," as [he] said he did in this case, the lawyer is not sending a report for the purpose of exposing an illegality and the lawyer is not blowing the whistle.

Chief Justice Magnuson concurred, and would hold that the attorney's breach of his fiduciary duties to the client bars the claim. In the Chief Justice's view, the attorney's violation of the duty of confidentiality was fatal to the claims:

A lawyer may bring a whistleblower claim, but he or she is not thereby relieved of the fiduciary obligations imposed by the Rules of Professional Conduct, either before or after the claim is brought. Any disclosures of client confidences must be within the strict confines of the Rules of Professional Conduct. I would therefore hold that when a lawyer breaches his or her fiduciary duty to the client, the client has an absolute right to terminate the attorney-client relationship. And that right cannot be burdened by any claim from the lawyer for compensation or other damages.

Justice Anderson dissented, and would hold that the court plurality has created an "artificial evidentiary hurdle in proving mental state" that failed to give deference to the favorable jury award to the former in-house attorney at trial. The dissent finds sufficient evidence to support the jury's conclusion that the attorney acted in good faith and with an intent to blow the whistle. The dissent notes that the attorney's supervisor was an attorney convicted of mail fraud and suspended in 1984.

Justices Page and Meyer joined the dissent.

(Mike Frisch)

June 24, 2010 in In-House | Permalink | Comments (0) | TrackBack (0)

Disqualification Ordered

An order denying the disqualification of Buchanan Ingersoll based on a former client conflict  was reversed by the West Virginia Supreme Court, which granted a writ of prohibition. The court recited the following facts:

Bluestone Coal and Bluestone Coal Sales, the petitioners herein, are companies engaged in the production and sale of coal. Both Bluestone companies are part of a conglomerate of twenty-nine affiliated closely-held companies owned and operated by James C. Justice, II (hereinafter “Mr. Justice”). These affiliated companies share one common General Counsel, Mr. Stephen W. Ball (hereinafter “Mr. Ball”), and the majority of these companies, including the two Bluestone companies involved in this case, are headquartered in the same office building in Beckley, West Virginia.

            Mountain State, one of the respondents herein, owns and operates a coke plant in Follansbee, West Virginia, and purchases coal to convert into coke; Mountain State's principal place of business is in Wheeling, West Virginia. On October 5, 2007, Mountain State and Bluestone Coal Sales entered into a coal supply agreement whereby Bluestone Coal Sales agreed to supply all of the coal required by Mountain State's Follansbee coke operations. Bluestone Coal served as the guarantor for Bluestone Coal Sales' obligations under this agreement. When Bluestone Coal Sales failed to deliver the requisite amount of coal in accordance with the agreement's terms, Mountain State filed suit against both Bluestone Coal Sales and Bluestone Coal in the Circuit Court of Ohio County on September 9, 2008.

            The law firm representing Mountain State in the underlying litigation, whose disqualification the Bluestone companies seek, is Buchanan Ingersoll. Buchanan Ingersoll is a large, nationwide, law firm, whose principal place of business is in Pittsburgh, Pennsylvania. At various times, Buchanan Ingersoll has been retained as counsel for certain of Mr. Justice's companies, including Dynamic Energy, Inc.; Harlan Development Corporation; James C. Justice Companies LLC; and Sequoia Energy, LLC, for which representations engagement letters were signed. Buchanan Ingersoll also has either directly represented or provided legal counsel to both Bluestone Coal and Bluestone Coal Sales; however, the exact nature of the relationship between Buchanan Ingersoll and the Bluestone companies, as well as whether there currently exists an attorney-client relationship between these entities, is disputed by the parties and will be discussed in further detail in Section III.B. of this opinion. See Section III.B., infra. It appears that Buchanan Ingersoll began
providing legal services for both Mountain State and Mr. Justice's companies in approximately 2005.

            Following Buchanan Ingersoll's institution of Mountain State's Ohio County lawsuit, the Bluestone companies moved the circuit court to disqualify Buchanan Ingersoll from continuing its representation of Mountain State. In support of their motion, the Bluestone companies variously contended that they were current clients of Buchanan Ingersoll such that continued representation of Mountain State in an adverse capacity would violate Rule 1.7 of the West Virginia Rules of Professional Conduct; that they were former clients of the law firm such that continued representation would violate Rule 1.9; and that, because certain, individual attorneys had formerly represented the Bluestone companies, their disqualification should be imputed to the entire law firm in accordance with Rule 1.10. By order entered November 20, 2009, the circuit court denied the Bluestone companies' motion to disqualify Buchanan Ingersoll, ruling that “no disqualifying conflict exists with respect to Buchanan Ingersoll & Rooney, LLP's representation of Mountain State Carbon, LLC, Plaintiff, in this action.”

The court found the matters substantially related: is apparent that the nature of Buchanan Ingersoll's representation of Mountain State in the underlying proceedings is “substantially related” to its prior representation of Bluestone Coal insofar as both the former and subsequent representations concern the Bluestone companies' performance, or lack thereof, under coal supply agreements under the factual, circumstantial, and legal contexts of the two cases.

            Factually, the two representations are virtually the same. Both the Coal Sourcing case and the instant litigation involve the same type of contract: a coal supply agreement. The agreements both involve the same mine, i.e., the Keystone Mine, and the same coal from that same mine. In both proceedings, Bluestone Coal has been named as a party defendant with respect to the failure to deliver coal as specified by the subject coal supply agreements and is ultimately liable for any obligations arising thereunder.

            Circumstantially, the two representations also are substantially related and strikingly similar insofar as “the current matter involves the work the lawyer performed for the former client.” Both cases allege deficient performance of a coal supply agreement, which is precisely the type of case in which Buchanan Ingersoll formerly represented Bluestone Coal. Specifically, Buchanan Ingersoll formerly represented Bluestone Coal as a defendant defending against allegations of a failure to perform a coal supply agreement in the Coal Sourcing case, and now is currently representing Mountain State as a plaintiff claiming that the coal for which it had contracted has not been delivered pursuant to the governing coal supply agreement in the instant litigation.

Legally, the two representations are nearly identical such that “there is a substantial risk that representation of the present client will involve the use of information acquired in the course of representing the former client, unless that information has become generally known.” ...Under the facts of this case, not only is there a substantial risk that the attorney could have used information obtained from the former client in the prior representation, there is actual evidence that such knowledge has been used to the former client's detriment. In both cases, Bluestone Coal was named as a party defendant. During the course of the Coal Sourcing litigation, Bluestone Coal asserted a defense of force majeure to excuse its nonperformance of the subject coal supply agreement. Reliance on this defense required Bluestone Coal to reveal its confidential coal supply agreements to its counsel. During the litigation initiated by Mountain State, Buchanan Ingersoll, on behalf of Mountain State, requested documents from Bluestone Coal regarding its prior reliance on the defense of force majeurebefore Bluestone Coal had filed an answer to Mountain State's complaint or had indicated what, if any, defenses it intended to assert in response to such claims. Because Bluestone Coal had not yet attempted to rely upon the defense of force majeure, and had not even had an opportunity to respond to Mountain State's complaint, it is apparent that Buchanan Ingersoll, from its former representation, possessed sufficient knowledge of Bluestone Coal to anticipate the defense upon which it may have relied in response to Mountain State's complaint. This strategy indicates that Buchanan Ingersoll used information it obtained from its former representation of Bluestone Coal to the detriment of its former client. Thus, because the subject matter of Buchanan Ingersoll's former and subsequent representations are virtually the same, it is clear that the third criterion for disqualification has been satisfied.

The court found that the elements of a prohibited former client conflict had been established. (Mike Frisch)

June 24, 2010 in Clients, Economics, Law & Business, Law Firms | Permalink | Comments (0) | TrackBack (0)

Wednesday, June 23, 2010

Findings Of Billing Misconduct Against Contract Attorney Overturned

The Illinois Review Board has concluded that a hearing's board's findings of misconduct were based on inadmissible evidence and that billing misconduct charges against a former Mayer Brown contract attorney were not proven. The review board explained:

The Administrator presumably introduced Administrator’s Exhibit 3 for the purpose of proving that [the accused attorney] worked fewer hours than were eventually billed to Mayer Brown. However, Administrator’s Exhibit 3 only purported to show the time elapsed between "edits." There was no testimony that adequately explained the correlation between hours worked and time elapsed between edits – or what an "acceptable" ratio of hours billed to elapsed time between edits would have been. In addition, there was other information that could have been introduced that would have more accurately reflected the time actually worked, such as records of when [the accused attorney] entered and left the building and the time records submitted to Mayer, Brown and to Ajilon [the contractor] . That information, however, was not introduced into evidence.

The predicate underlying the Administrator’s charge was, of course, that the time spent between edits and the hours billed should have been approximately equal. But no witness provided clear, reliable testimony as to what Case Data actually recorded. Instead, the evidence was ambiguous concerning such critical issues as what actually constituted an "edit"; what, if anything, the system would show if an attorney simply viewed a document and moved onto another without making any changes; whether the system prompted the user to affirmatively save any changes made or whether such changes could be inadvertently lost, and whether any record of work done would be lost if documents were later reviewed again.

For example, [the Mayer Brown supervisor] testified that Case Data recorded an edit when a document was coded, but also when the user moved between documents. She later testified that the system would not record an edit if the user simply moved between documents. According to Owen’s testimony, Case Data had different modes, one for simply looking at documents and another that permitted reviewing and editing documents. This leaves open the possibility that a person could inadvertently be in the wrong "mode" and, consequently, that the system might fail to record edits.

Administrator’s Exhibit 3 is also flawed on another, more basic, level: it is merely a summary of some of the information recorded on the Case Data system. This is problematic for at least two different reasons. First, a report generated based on a person’s selection of certain computer-generated information is hearsay, not falling within any exception to the rule. Second, for a summary to be admissible, the original information on which the summary is based must, at a minimum, be made available to the opposing party. The original information was not made available to the Respondent here, nor, as it turns out, could it have been because the Respondent’s underlying work product was evidently erased almost immediately after the report was generated when the documents that had been assigned to him were re-reviewed.(citations omitted)

The Administrator’s complaint alleged that [the accused attorney] engaged in professional misconduct, including conduct involving fraud and dishonesty, because he claimed to have worked a total of 135 hours when in fact he worked only 51 hours and 45 minutes. This allegation, which formed the crux of the charges against [him], was based entirely on Administrator’s Exhibit 3.

The proceedings against a respondent are defined by the allegations of the complaint, and the respondent cannot be disciplined based on misconduct other than that charged in the complaint...We hold that Administrator’s Exhibit 3 was erroneously admitted into evidence. Further there was insufficient evidence otherwise to prove the Administrator’s charges by the clear and convincing standard required.

The hearing board found that the key document was not properly admitted as a business record or on any other hearsay exception. Rather:

The predicate underlying the Administrator’s charge was, of course, that the time spent between edits and the hours billed should have been approximately equal. But no witness provided clear, reliable testimony as to what Case Data actually recorded. Instead, the evidence was ambiguous concerning such critical issues as what actually constituted an "edit"; what, if anything, the system would show if an attorney simply viewed a document and moved onto another without making any changes; whether the system prompted the user to affirmatively save any changes made or whether such changes could be inadvertently lost, and whether any record of work done would be lost if documents were later reviewed again.

For example, [the Mayer Brown supervisor]  testified that Case Data recorded an edit when a document was coded, but also when the user moved between documents. She later testified that the system would not record an edit if the user simply moved between documents. According to [another Mayer Brown supervisor's]  testimony, Case Data had different modes, one for simply looking at documents and another that permitted reviewing and editing documents. This leaves open the possibility that a person could inadvertently be in the wrong "mode" and, consequently, that the system might fail to record edits.

(Mike Frisch)

June 23, 2010 in Bar Discipline & Process | Permalink | Comments (1) | TrackBack (0)

Home Insecurity

An Arizona Hearing Officer has recommended a censure with probation for two years of an attorney whose bar problems started when police responded to the ringing of his home security alarm. No one was home but the garage door was partially open. The police entered the garage and noticed an odor of marijuana and plastic wrapping. They got a search warrant and found "plastic wrap with marijuana residue, a small scale and an empty box for a larger digital scale."

The attorney claimed he was set up. He was charged with two felonies. At his first trial, the jury hung. Fourteen months later, a jury found him guilty of lesser-included charges of possession of marijuana and drug paraphernalia. He was sentenced to 18 months of supervised probation and voluntarily entered the Bar's member assistance program. While he maintained his innocence of the criminal charges, he told the Bar program director that he had previously used marijuana and "was interested in stopping that use completely." He has been drug-free for three years, which has been verified through testing of his hair follicles.

The hearing officer concluded that suspension was not necessary under the circumstances. The State Bar had supported a departure from the presumptive sanction of a suspension. (Mike Frisch)

June 23, 2010 in Bar Discipline & Process | Permalink | Comments (0) | TrackBack (0)

Just A Mistake, Not An Ethical Violation

The Indiana Supreme Court has issued a published judgment in favor of an attorney accused of knowingly making a false statement to a tribunal. The attorney had cited a Court of Appeals decision at a suppression hearing that had been vacated and replaced by a Supreme Court decision.

The hearing officer accepted the attorney's explanation that he had not knowingly cited incorrect law. The Disciplinary Commission did not seek review. (Mike Frisch)

June 23, 2010 in Bar Discipline & Process | Permalink | Comments (0) | TrackBack (0)

Tuesday, June 22, 2010

Welcome To The Tea Party

A candidate for judicial office may address two Tea Party Patriots groups in some circumstances, according to a recent opinion of the Florida Judicial Ethics Advisory Committee:

...the Committee first notes that the website materials provided by the candidate suggest that the local Patriots group is an organization similar in mission and vision to the Tea Party Patriots organization, and so the Committee reaches the same conclusion discussed herein as to both organizations.

The Tea Party Patriots’ national website, provided by the candidate, states that its mission is to “attract, educate, organize and mobilize our fellow citizens to secure public policy consistent with our three core values of Fiscal Responsibility, Constitutionally Limited Government and Free Markets.”  The website further states that its philosophy is to “recognize and support the strength of grassroots organization powered by activism and civic responsibility at a local level.” 

The website material provided regarding the local Patriots group states that it is comprised of local citizens sharing a common passion for liberty and limited government, which believes that the Constitution of the United States maintains the powers of government are only those granted within the Constitution.  Its mission includes, among other activities, “[t]o monitor, report and present evidence of encroachment upon Constitutional Liberty.”  The organization’s pledge is “I will do all within my power to preserve, protect and hold government accountable to the United States Constitution.  I will educate myself on the United States Constitution, whereas I may be able to defend the same against all usurpation’s [sic].” 

Based on the materials submitted by the candidate regarding these organizations, it appears to the Committee that these Patriots gatherings either are associated with, or may be perceived as being associated with, what has become known as the Tea Party movement.  There appear to be a number of political organizations using the name Tea Party, as well as a political party registered with the Florida Department of State as the Tea Party.  Based on the well-publicized political activism and ongoing participation in current political electoral processes of the Tea Party on both a national and local level -- either as a grass roots movement or as a registered political party -- the Committee believes that the candidate should treat the gatherings of both of these Patriots groups as political party functions. 

In describing the limited circumstances under which a judge may attend a political party function, Canon 7(3)(C) provides that “[a] judicial candidate attending a political party function must avoid conduct that suggests or appears to suggest support of or opposition to a political party, a political issue, or another candidate,” thereby making clear that such conduct is inappropriate political activity prohibited by the Code.  Based on the activities of the various Tea Party organizations, the Committee believes that a judicial candidate’s appearance at one of these Patriot gatherings -- other than as prescribed by Canon 7(C)(3) -- would at a minimum give the appearance of inappropriate political activity violative of Canon 7.  Accordingly, the Committee believes that the candidate may speak at one of these functions only under the conditions described in Canon 7(3)(C), that is, the event is not a fundraiser, the other candidates for the position have been invited, and the candidate limits the presentation to the topics permitted by Fla. Code Jud. Conduct, Canon 7(3)(C).

The Committee further opines that, absent the restrictions set forth in Canon 7(3)(C), the candidate’s attendance and speaking at the events may call into question the candidate’s impartiality and independence, in violation of Canon 7(A)(3)(b), or may be perceived as an attempt to directly or indirectly solicit the endorsement of a major political party, in violation of Canon 7 and Florida Statutes 105.071(1).  Fla. JEAC Op. 04-09 (Election).

The Committee is also of the opinion that the factual scenario presented here is different than that presented by prior inquiries regarding the propriety of attending meetings of organizations which merely have political interests such as the League of Women Voters, the NAACP, and the NRA.  The Committee believes these groups are distinguishable from political parties or other political organizations whose principal purpose is to further the election or appointment of candidates to political office.  Although it is not clear whether the Committee’s Opinion regarding “United We Stand” is factually distinguishable, the Committee notes that its members at the time were divided as to the result reached in that Opinion.

Finally, the Committee is expressly charged with rendering advisory opinions interpreting the application for the Code of Judicial Conduct to specific circumstances confronting or affecting a judge or judicial candidate.  The Committee does not render legal opinions regarding the constitutionality or enforceability of various provisions of the Florida Code of Judicial Conduct.  See Fla. JEAC Op. 02-16.

(Mike Frisch)

June 22, 2010 | Permalink | Comments (0) | TrackBack (0)

Monday, June 21, 2010

Home Alone

An Arizona Hearing Officer has recommended a two-year suspension followed by probation if reinstatement is obtained in a matter that was initiated when the attorney left his live-in girlfriend's son at home while he gambled at a nearby casino. The child called the police,who came and found drugs. He was charged with child neglect and a felony drug offense and pled guilty to misdemeanor possesion of drug paraphenalia.  

He also had neglected a divorce case and had failed to participate in the bar disciplinary process. (Mike Frisch)

June 21, 2010 in Bar Discipline & Process | Permalink | Comments (0) | TrackBack (0)

Threats To Judge Lead To Revoked Probation

The Tennessee Court of Criminal Appeals held that a trial judge had properly revoked the probation of a defendant who pled guilty to child abuse. The probationer had been arrested for felony retaliation against a different judge who was considering her vistation rights with her children. She told  her anger management and parenting skills teacher that she would take away the judge's children if the judge took her children. She also told the teacher that she had followed the judge home several times, knew the judge had a son and daughter, and had access to explosives. The guardian ad litem for the children testified that the probationer had previously threatened to burn down her house. (Mike Frisch)

June 21, 2010 | Permalink | Comments (0) | TrackBack (0)