Thursday, January 3, 2019

Virgin Islands Supreme Court Rejects Akin Gump Claim That "Cross-Jurisdictional Litigation Practice" Was Permissible

The Virgin Islands Supreme Court denied pro hac vice admission to three Akin Gump attorneys  and referred their conduct to regulatory authorities

Mark Eckard, Esq., moved for the pro hac vice admission of Jindal, Roush, and Schmitten—all affiliated with the Akin Gump LLP law firm—in early 2018 to represent defendant U.S. Concrete, Inc. in Gilbert et al. v. Spartan Concrete, LLC et al., Super. Ct. Civ. No. 486/2017 (STT), a case in which U.S. Concrete and others were alleged to have violated the Virgin Islands Anti-Monopoly Law, the Virgin Islands Consumer Protection Law, and the Virgin Islands Consumer Fraud and Deceptive Business Practices Act. Although this Court granted those motions, it advised Attorney Eckard and the applicants that their authorization to practice on a pro hac vice basis would not commence until and unless they were administered the pro hac vice attorney oath. However, neither Jindal, Roush, nor Schmitten ever took the pro hac vice attorney oath.

On April 11, 2018, the Superior Court granted the plaintiffs’ motion to voluntarily dismiss all claims against U.S. Concrete. On May 11, 2018, U.S. Concrete filed a motion for attorneys’ fees and costs pursuant to 5 V.I.C. § 541 and Rule 54(d)(1) of the Virgin Islands Rules of Civil Procedure. The motion, which was signed by Attorney Eckard, requested attorneys’ fees in the amount of $75,562.50. However, the motion was accompanied by affidavits from Jindal, Roush, and Schmitten, in which each identified themselves “as counsel in the above consolidated case on behalf of U.S. Concrete,” that they “also represent co-defendant Heavy Materials, LLC,” and set forth an itemized list of “legal services” provided to U.S. Concrete from December 22, 2017, to April 23, 2018, with respect to the Gilbert matter. These affidavits reflected that Jindal, Roush, and Schmitten each performed, respectively, 34.5 hours, 9 hours, and 84.9 hours of legal services, resulting in legal fees, respectively, in the amount of $17,283.75, $6,750.00, and $39,418.75. In addition, the motion included affidavits from Amanda B. Lowe and Patrick O’Brien—two Virginia attorneys employed by Akin Gump, who are not admitted to practice in the Virgin Islands and who never applied to this Court for pro hac vice admission—in which they also stated that they represented U.S. Concrete and included itemized lists of “legal services” ranging from December 20, 2017, to April 3, 2018, consisting, respectively, of 18.1 hours and 9.1 hours, resulting in legal fees, respectively, in the amount of $8,507.00 and $3,468.00.

In response, plaintiffs raised the issue of unauthorized practice.

In their consolidated response, Eckard, Jindal, Roush, and Schmitten allege that the plaintiffs have used the unauthorized practice of law complaint for leverage in the underlying litigation because their counsel purportedly called Eckard the day after the attorneys’ fees motion was filed and asked that it be withdrawn or else an unauthorized practice of law complaint would be filed. We do not see how the conduct of the plaintiffs or their counsel is relevant to this proceeding, since such conduct would not in any way excuse the conduct of Eckard, Jindal, Roush, and Schmitten for which they have been required to show cause to this Court...

Moreover, we note that Rule 211.8.3 of the Virgin Islands Rules of Professional Conduct mandates that “[a] lawyer who knows that another lawyer has committed a violation of the Rules of Professional Conduct that raises a substantial question as to that lawyer’s honesty, trustworthiness or fitness as a lawyer in other respects, shall inform the appropriate professional authority.” V.I.S.CT.R. 211.8.3(a). Rule 211.8.3(a), like similar rules in many other jurisdictions, is adapted from American Bar Association Model Rule of Professional Conduct 8.3(a), and by its own terms creates an ethical obligation for an attorney to report certain misconduct by another attorney. That plaintiffs’ counsel was the opposing attorney in the underlying case does not relieve counsel of his obligation to report the misconduct, nor does it in anyway mitigate the misconduct committed by Eckard, Jindal, Roush, and Schmitten...

That plaintiffs’ counsel notified this Court only after he provided Eckard with an opportunity to both address his concerns and mitigate or rectify the misconduct is not evidence of an improper purpose, but wholly consistent with counsel taking his obligations under Rule 211.8.3 seriously.

The court rejected the attorneys' defenses

As a threshold matter, the claim that the acts performed by Jindal, Roush, and Schmitten were “consistent with ordinary cross-jurisdictional litigation practice,” or that it is relevant that the acts were performed while they were physically present in Washington, D.C., is wholly without merit...

Although Jindal, Roush, and Schmitten were physically based in Washington, D.C., their conduct clearly relates to the Gilbert case, which was pending before the Superior Court of the Virgin Islands. Moreover, when they applied for pro hac vice admission, Jindal, Roush, and Schmitten agreed to submit to the jurisdiction of this Court and to be bound by the disciplinary rules applicable to Virgin Islands attorneys. See V.I.S.CT.R. 201. Therefore, the  Virgin Islands definition of the practice of law—including Virgin Islands rules and statutes relating to the unauthorized practice of law—apply to their conduct.

Thus

In this case, Eckard, Jindal, Roush, and Schmitten have admitted to engaging in conduct that implicated the rights and remedies of U.S. Concrete in the Virgin Islands. Section 443, by its own terms, prohibits “the doing of any act by a person who is not a member in good standing of the Virgin Islands Bar Association for another person usually done by attorneys-at-law in the course of their profession,” and expressly identifies the preparation of pleadings and legal papers as one such activity. 4 V.I.C. § 443(a). Additionally, this Court has previously held that development of case strategy is the type of act that is “entrusted to the judgment of licensed attorneys.” Campbell, 59 V.I. at 722.

This Court has previously observed—but did not hold—that it may be possible for individuals not licensed to practice law in the Virgin Islands to assist licensed Virgin Islands attorneys as paralegals or secretaries with respect to certain tasks without violating the prohibition on unauthorized practice of law.

...it is clear that Jindal, Roush, and Schmitten had held themselves out as attorneys in connection with this matter—even if only in conjunction with the attorneys’ fees motion—and that any work they claimed to have performed necessarily exceeded the acts—if any—that could permissibly be performed by a paralegal or secretary.

And

Finally, we reject the proposition that the Akin Gump law firm is “antitrust counsel to U.S. Concrete and regularly provide it with antitrust advice,” (Resp. 7), in any sense authorized Jindal, Roush, Schmitten, or any other Akin Gump lawyer to represent U.S. Concrete in this matter. The complaint in the Gilbert case did not raise a claim under federal antitrust law, or assert any federal claim for that matter. Rather, the complaint solely asserted causes of action arising under Virgin Islands statutory law – specifically, the Virgin Islands Anti-Monopoly Law, the Virgin Islands Consumer Protection Law, and the Virgin Islands Consumer Fraud and Deceptive Business Practices Act. But even if the Gilbert lawsuit involved a federal claim, the Supreme Court of the United States has held that “[t]here is no right of federal origin that permits . . . lawyers to appear in state courts without meeting that State’s bar admission requirements.” Leis v. Flynt, 439 U.S. 438, 443 (1979). Neither Supreme Court Rule 201, Virgin Islands Rule of Professional Conduct 211.5.5, section 443 of title 4 of the Virgin Islands Code, nor any other applicable Virgin Islands rule or statute codifies a federal practice exception to either the prohibition on the unauthorized practice of law or the requirement that one cannot practice law in the Virgin Islands without being a member of the Virgin Islands Bar, and we agree with the courts that have declined to recognize such an exception.

Postscript

we also refer this matter to the Office of Disciplinary Counsel, the Board on Professional Responsibility, the Board on Unauthorized Practice of Law, and the Virgin Islands Attorney General for the purpose of taking any additional action which they may find appropriate with respect to the conduct of Eckard, Jindal, Roush, Schmitten, Lowe, O’Brien, and the Akin Gump law firm.

More bad news via footnote

As this Court has previously explained, multiple entities may exercise concurrent jurisdiction to investigate and adjudicate unauthorized practice of law complaints, with different remedies being available to those entities. For instance, the Board on Professional Responsibility may impose attorney discipline on Eckard and the three applicants for pro hac vice admission, whereas the Board on Unauthorized Practice of Law may obtain an order, enforceable by contempt, to direct that the unauthorized practice of law be ceased immediately. However, ultimately it is this Court that possesses the final word on what constitutes the unauthorized practice of law in the Virgin Islands, and whether the prohibition on unauthorized practice has been violated. Because we find that the prohibition on unauthorized practice has occurred in this case, any proceeding before the Board on Professional Responsibility or the Board on Unauthorized Practice of Law will be limited to the issue of remedy, and not the question of whether the prohibition on the unauthorized practice of law has been violated.

If the Virgin Islands imposes public discipline, that presumably will trigger a reciprocal discipline inquiry in the jurisdictions where the sanctioned attorneys are admitted (presumably D.C.).

The District of Columbia Court of Appeals has imposed reciprocal discipline based on sanctions ordered in Palau, "a Trust Territory located in the Pacific Islands."

I suspect that D.C. authorities will be much more sympathetic to the idea of cross-jurisdictional litigation practice than the court here.  (Mike Frisch)

https://lawprofessors.typepad.com/legal_profession/2019/01/the-virgin-islands-supreme-court-denied-pro-hac-vice-admission.html

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