New York Disbars Attorney For Sexting With Client

The attorney was disbarred after an exchange of text messages with a client. The opinion notes the following:

Per Curiam Opinion: Respondent was admitted to the practice of law by this Court on June 24, 1993, and he formerly maintained an office in Auburn. In August 2020, the Grievance Committee filed a petition asserting against respondent a single charge of professional misconduct, which alleges that he engaged in conduct that adversely reflects on his fitness as a lawyer by sending to a client via text message four unsolicited images of his genitalia. The Grievance Committee simultaneously filed a motion for an order suspending respondent from the practice of law on an interim basis on the ground that he had failed to cooperate in a grievance investigation concerning five additional client complaints. Respondent thereafter failed to appear before this Court or to file papers in response to that motion and, by order entered September 16, 2020, the Court suspended respondent from the practice of law on an interim basis effective immediately and until further order of the Court (Matter of Moody, 187 AD3d 1603 [4th Dept 2020]). Respondent remains suspended pursuant to that order. In January 2021, the Grievance Committee filed a second petition asserting against respondent four charges of professional misconduct, including neglecting client matters, failing to refund unearned legal fees, failing to cooperate in the grievance investigation, and failing to comply with attorney registration requirements.
In June 2021, the Grievance Committee filed a motion for an order, pursuant to 22 NYCRR 1240.8 (a) (6), finding respondent in default and deeming admitted the allegations of both petitions on the ground that, although respondent was personally served with the petitions in August 2020 and January 2021, respectively, he failed to file an answer within 20 days after he was served as required under the rules of this Court (see 22 NYCRR 1020.8 [b]). The Grievance Committee has filed proof that respondent was personally served with the motion for default in May 2021. Respondent thereafter failed to file papers in response to the motion on or before the deadline imposed by the Court. Consequently, we grant the motion of the Grievance Committee, find respondent in default on the petitions, and deem admitted the allegations therein.

With respect to the sole charge of the petition filed in August 2020, respondent admits that, in late 2018, he was retained to represent a client in a criminal matter. Respondent admits that, on or about April 20, 2019, while the criminal matter was pending, he engaged in a series of text messages with the client whereby respondent sent to the client four unsolicited images of his genitalia. Respondent admits that, after the client filed a grievance complaint, respondent asserted during the investigation that he mistakenly believed he had been exchanging text messages with a friend or acquaintance who lives in Florida. Respondent admits, however, that the series of text messages between respondent and the client contain numerous references to the personal circumstances of the client, without any indication that respondent believed he was corresponding with a person other than the client.

The sexting led to a finding that the lawyer had violated Rule 8.4(d) (conduct prejudicial to the administration of justice) and (h) (conduct that adversely reflects on his fitness as a lawyer). There were also charges that the lawyer had neglected certain client matters.

Hearing Board Recommends Suspension For Lawyer Who Failed To Communicate With Clients

The ARDC Hearing Board has recommended a four-month suspension for a lawyer who, it found, did not properly communicate with his clients and engaged in a conflict of interest in violation of Rule 1.7(a)(2). The lawyer represented a restaurant and four employees (servers) who were accused of violating a local ordinance. The lawyer attended a hearing and agreed to a resolution of the claims. The employees claimed that the lawyer did not have their consent to resolve the cases on their behalf.

Rule 1.7(a) provides: (a) Except as provided in paragraph (b), a lawyer shall not represent a client if the representation involves a concurrent conflict of interest. A concurrent conflict of interest exists if: (1) the representation of one client will be directly adverse to another client; or(2) there is a significant risk that the representation of one or more clients will be materially limited by the lawyer’s responsibilities to another client, a former client or a third person or by a personal interest of the lawyer.

The ARDC’s Summary stated:

“A local ordinance prohibited persons from exposing their buttocks while acting as a waiter, waitress or entertainer in a business with a liquor license. A restaurant retained Respondent to represent it and four of its servers on charges of violating that ordinance and agreed to pay any fines imposed on the servers if they were found to have violated the ordinance. Without fully informing the servers of their rights and options, Respondent entered pleas admitting that the restaurant and the servers violated the ordinance. Respondent thereby failed to properly consultwith his clients concerning the objectives of the representation, failed to properly inform and explain matters to hisclients, and improperly represented clients despite a conflict of interest.”

The Opinion continues to describe the testimony of the servers.

Based on the testimony of Sarah, Briana and Allison, Morales or another manager collected their citations and told the servers they did not have to go to court. Management staff told the servers that Twin Peaks would take care of the situation and the servers would not have to deal with it. None of them ever met with Respondent or expected that anyone would admit to the charge on their behalf. Given the opportunity, Sarah, Briana and Allison each wouldhave sought to present a defense. All three considered any violation the restaurant’s responsibility, not hers, as she was dressed as her employer required. Further, Briana was unaware of the prior police warning. Sarah testified thatmanagement told the servers to wear the lingerie despite that warning. While Allison and Briana indicated otherwise, Morales believed that all servers were clad in compliance with the ordinance, and Sarah denied that any portion of her buttocks was exposed. According to Morales, photographs of the servers with their buttocks covered depicted how they were dressed when police arrivedon February 11, 2017. (Tr. 59-75, 110, 130-37, 141-43, 151,

176-78, 192, 223-25, 236-39, 317-24, 334-39; Resp. Ex. 6).

Sarah, Briana and Allison first learned that a plea of liable had been entered well after the fact. They were able to obtain information about the disposition of the citations. They were concerned about having any record of this violation and having to disclose the violation when applying for school or jobs in the future.  (Tr. 80-93, 146-47, 152, 170, 173, 325-28).

Based on Respondent’s testimony, he met with the servers on March 9, 2017, told them he represented Twin Peaks, and Twin Peaks authorized him to represent them, at no cost to them, if they did not want, or already have, another attorney. Respondent informed the servers of the March 14 court date, that there were citations against them individually and, if they wanted, they should get counsel to represent them. He told the servers they did not have to use him as their attorney. All agreed to have him represent them. (Tr. 279-83, 288-89, 512). Respondent did not inform the servers of the material risks of joint representation or advise them that they should consult with independent counsel. (Ans. at pars. 16, 17). Respondent did not believe there was any conflict of interest between Twin Peaks and the servers. He did not consider whether the servers might have a cause of action against therestaurant. (Tr. 283-86, 297, 509).

Respondent testified that, during the March 9 meeting, he told the servers that he would see if the village would dismiss the cases against them, but that would require an agreement from the village prosecutor. He recognized that was the servers’ first choice. Respondent believed that no one had any viable defense or was apt tosucceed if the case went to hearing, as the police report indicated that these servers all were dressed in a way thatviolated the ordinance and all covered

their buttocks after police issued the citations. Respondent understood that the photographs were taken after the citations were issued, not before. Respondent explained that to the servers. Respondent did not believe the servers had a defense to the citations based on lack of notice to them. While recognizing its potential as mitigation, Respondent was not certain whether the fact that the restaurant dictated the servers’ attire might have been a legal defense to the citations against the servers. Respondent informed the servers that, if a plea had to be entered, Twin Peaks would pay any fine against them. Respondent saw that as the only real option, absent an agreement from thevillage prosecutor to dismiss the citations against the servers. Respondent noted that the servers were not familiar with the legal system. From his perspective, all the servers preferred to not spend money for an attorney and to avoidhaving to go to court or see him on an ongoing basis. Respondent thought he had the servers’ authority to enter a pleaon their behalf. (Tr. 280-88, 295- 96, 510-11, 531-33, 542-43, 546-49).

Respondent did not communicate directly with any of the four servers after March 9, 2017. He relied on localmanagers, particularly Morales and Tony Gutierrez, to communicate with them. (Tr. 279, 288, 522-23). Respondent did not inform the servers of the status of the administrative hearings, Huguelet’s refusal to dismiss the citationsagainst them or his negotiations with Huguelet. (Ans. at par. 20; Tr. 297). Respondent did not inform the servers that he had pled them liable to the ordinance violation, what that plea meant or the time within which to appeal.Respondent sent copies of the disposition to Gessner, but not to anyone at Twin Peaks Orland Park. (Ans. at par. 27;Tr. 292-93, 530).

Comments: The Panel found a violation of Rule 1.7(a)(2) Conflict of Interest and recommended a four-month suspension. In other words, it was impossible for the attorney to represent both the servers and the restaurant. The restaurant’s goal was to have a speedy resolution of the municipal dispute which the lawyer obtained. The servers’ goal would have been to resist any acceptance of responsibility because it might impact their ability to obtain work in the future. The panel found that the lawyer’s representation of the servers was limited by his representation of the restaurant. The lesson here is to think carefully about conflicts of interest and to retain separate counsel for each party to the municipal proceeding.

Edward X. Clinton, Jr.

ARDC Hearing Board Recommends Suspension For Attorney Who Made False or Reckless Statements Impugning Judge’s Integrity

An ARDC Hearing Board panel has recommended a suspension for an attorney who made false or reckless statements impugning the integrity of a judge. Here is a quote from the excellent opinion of the panel:

The Administrator proved by clear and convincing evidence that Respondent sent three emails to Magistrate Judge Finnegan’s email account containing statements about Magistrate Judge Finnegan’s integrity that were false or made with reckless disregard as to their truth or falsity. By sending the inappropriate emails, particularly after being instructed not to do so, Respondent engaged in conduct that disrupted the tribunal and prejudiced the administration of justice…..

Respondent has been licensed to practice in Illinois since 2006. She is also licensed in Texas and Michigan.(Tr. 54-55).

Barry Epstein hired Respondent in 2012 to represent him in a dissolution proceeding filed by Paula Epstein.In 2014, Respondent filed a complaint on Barry’s behalf in the United States District Court for the NorthernDistrict of Illinois, alleging that Paula and her attorney, Jay Frank, violated federal law by accessing Barry’s private emails without his authorization. (Tr. 55). Magistrate Judge Sheila Finnegan (Judge Finnegan) superviseddiscovery in the federal proceeding. Judge Finnegan maintained an email account known as the “proposed orderaccount”. The charges before us arise from three email messages Respondent sent to the proposed order accountand others involved in the Epstein proceedings.  (Tr. 56).

Respondent sent the first email at issue on April 18, 2017, after Judge Finnegan denied her emergencymotion for an extension of time to take Paula’s deposition. Respondent sent the email

to the proposed order account, opposing counsel Scott Schaefers, and Scott White, the courtroom deputy. It stated as follows in relevant part:

Today in court, no matter what I said to you, you had already made up your mind, and evenquestioned my sincerity with regard to my preparation for upcoming trial.

***

. . . since the beginning, you never seem to doubt anything he [Schaefers] says, as you appear todoubt me. Still, I stated to you in open court that “I don’t want to be hated” for doing my job, but it sure seems that way, as I never get a break. Scott is the lucky guy who senses same as he can just pickup the phone to call you knowing he will get his way…or for so-called the Posner Defense2.

***

It’s not fair that my client (and I) is [sic] being treated badly for suing his wife/ex wife, and everyoneis protecting Paula – why? Since when does “two” wrongs make a “right”? [sic] How am I to prove my case if I am not given a fair chance to do my work, properly.

(Adm. Ex. 1).

The following day, Judge Finnegan instructed Respondent that the parties were not to use the proposed order account to argue the merits of a motion, share their feelings about a ruling, or talk generally about the case with her.She told Respondent her email was improper and directed her not to send any such emails in the future. (Adm. Ex. 1). Respondent received and understood Judge Finnegan’s instructions.  (Tr. 69-70).

On June 15, 2017, Respondent filed a motion to extend discovery and for leave to depose Jay Frank. JudgeFinnegan denied the motion. Allison Engel, Judge Finnegan’s law clerk, emailed a copy of Judge Finnegan’s order toRespondent and Schaefers at 6:37 p.m. on June 23, 2017. Two hours later, Respondent sent an email to Engel, Schaefers, and the proposed order account which stated as follows, in relevant part:

I’m very upset, I do not agree with Judge Finnegan’s order and I will depose the former co-defendant, Jay Frank, despite the fact this court is protecting him and his co-conspirer! ScottSchaefers had no standing to challenge my subpoena to depose

Jay Frank! I’m entitled to depose him! And I will call him to testy [sic] at trial to show the world what a corrupt lawyer he is! And the judges who protect this criminal by squeezing the discoverydeadlines!!! No no no!

This is outrageous order of Judge Finnegan and it will be addressed accordingly! Judges are helping the criminal to escape punishment by forcing to shorten all deadlines!!!

This Judge is violating my client’s rights first by the truncated discovery deadlines and now helpingPlaintiff to escape punishment for wrongs she committed!

I’m outraged by the miscarriage of justice and judges are in this to delay and deny justice for myclient!

I’m sickened by this Order!!! (Adm. Ex. 2).

On June 26, 2017, Respondent sent another email to Engel, Schaefers, and the proposed order account, which stated as follows in relevant part:

Plaintiff’s motion is not late just because this court decided not to extend discovery deadlines, to protect the Defendant! I have asked this court numerous times for an extension of all cutoff deadlines, without avail. Take this into account when drafting your flawed order.

***

For anyone to insult me in this degree calls questions [sic] this court’s sincerity and veracity. Howdare you accuse me of not having looked at the SC docket regularly.

***

How do you know I did not see the SC order???? Where do you get this information? Expartecommunications with Defendant’s attorney, Scott? – smearing dirt behind my back?

The more I read this order, again and again, I am sick to my stomach, and I get filled with angerand disgust over this ‘fraudulent’ order by this court!

***

You both, Allison and J. Finnegan, have done me wrong, and depicted me very poorly in yourpublic order.  How dare you do that to me?!

What goes around comes around, justice will be done at the end! I wonder how you people sleep at night? Including Scott!

(Adm. Ex. 3).

On June 27, 2017, Judge Finnegan entered an order admonishing Respondent for violating her directives related to the proposed order account and making highly inappropriate statements. Judge Finnegan directed Respondent to immediately cease all email communication with her and her staff. (Adm. Ex. 4).

Comment: no matter how you feel about a ruling that went against you, do not question the integrity of the judge or the process. Instead, focus on making fact-based arguments in your client’s favor.

Ed Clinton, Jr.

It Is Time to Rethink The Rules on Responding To Negative Reviews

The American Bar Association has an advisory opinion, No. 496, and an article on how to respond to negative reviews.

https://www.americanbar.org/groups/litigation/publications/litigation-news/top-stories/2021/how-to-ethically-respond-to-negative-online-reviews/

I tell lawyers not to respond to negative reviews. However, I believe that it is long past time for the rules to change. Under the current system, clients have free rein to disparage lawyers and lawyers can do little about it without incurring discipline.

Here is how I would like to see the rules change.

First, a client who writes a negative review of the lawyer should be on notice that the lawyer may respond to that review. The lawyer should be able to say “The review is false” or “The review is misleading.” The lawyer should be able to say “We did not represent this person.” or “We declined this person’s case” without any fear of a disciplinary proceeding.

Second, if the lawyer is falsely accused of a wrongful act, the lawyer should be able to respond to that accusation without fear of discipline, including explaining the facts necessary to rebut the false accusation.

Third, unless the client reveals her name and discloses confidential information, the lawyer should not reveal the client’s identity or any confidential information.

Note that the rules now do not allow the types of responses I have outlined above. The system is not fair to lawyers and it should be changed.

www.clintonlaw.net

Lawyer Suspended For Violating An Order of Protection And Failing To Report Conviction to ARDC

The Hearing Board suspended a lawyer for two years and until order of court for the conduct described below:

An emergency order of protection, entered following the dissolution of Respondent’s marriage, prohibited Respondent from contacting his ex-wife or entering their former home. Even though Respondent was personally served with that order, he sent his ex-wife multiple text messages. After being arrested for violating the order of protection, Respondent sent his ex-wife additional text messages. Those messages included false claims, which Respondent reiterated to police and medical personnel, that he had been raped. He was arrested again. Subsequently, Respondent entered and removed property from the marital house and then drove to his ex-wife’s residence, conduct for which Respondent was arrested a third time.Respondent pled guilty to violating the order of protection and was placed on probation. Probation was revoked after Respondent violated probation by continuing to use alcohol and failing to report.

In aggravation, Panel considered the fact that Respondent violated court orders knowingly, repeatedly and over time. His false claims of rape included racial slurs. Respondent’s minimal participation in his own disciplinary proceedings is a serious aggravating factor. Although he participated the first prehearing, thereafterRespondent ignored these proceedings.

The decision was issued on September 16, 2021. 2020 PR 00069. The respondent was charged with (a) conviction of a crime and (b) failing to report his conviction to the Administrator.

The Clouds Surrounding Rudy Giuliani Are Getting Darker

Recently, the Appellate Division of the State of New York issued an interim suspension of Rudy Giuliani’s law license on the ground that he repeatedly made false statements to courts concerning the 2020 election. This was an interim proceeding. Giuliani will get an opportunity to address the allegations at the hearing in that matter. Giuliani contests the allegations. However, the court concluded that:

“….[W]e conclude that there is uncontroverted evidence that respondent communicated demonstrably false and misleading statements to courts, lawmakers and the public at large in his capacity as lawyer for former President Donald J. Trump and the Trump campaign in connection with Trump’s failed effort at reelection in 2020. These false statements were made to improperly bolster respondent’s narrative that due to widespread voter fraud, victory in the 2020 United States presidential election was stolen from his client.”

In the Matter of Rudolph Giuliani, Case No. 2021-00506 (New York Appellate Division First Judicial Department), May 3, 2021.

The interim suspension is controversial, but it is an important opinion.

Today, another shoe dropped on Giuliani. In the case US Dominion, Inc. v. Giuliani, No. 21-cv-2013 (the sister case is US Dominion v. Powell, No. 21-cv-0040), the court held that Dominion’s claim for defamation stated a claim. When a defamation lawsuit is filed, the defendant will typically file a motion to dismiss. If the motion is granted with prejudice, the case comes to an end. If the motion is denied, the case goes forward to discovery. Dominion ultimately bears the burden of proof and, no doubt, Giuliani will contest the allegations in the Complaint. In my experience few defamation lawsuits survive a motion to dismiss. When a case does survive a motion to dismiss, that is a serious matter for the defendants.

In his motion to dismiss, Giuliani argued that Dominion did not adequately allege that it was damaged by Giuliani’s actions. The court rejected the claims and denied the motion to dismiss. Discovery will soon proceed on these claims.

The Court is not aware of any case requiring a corporate plaintiff alleging defamation per se to plead damages specially, and by its terms Rule 9(g) does not include such a requirement. In any event, Dominion has pleaded lost profits with the particularity required by Rule 9(g). Under that rule, a defamation plaintiff must set “forth the precise nature of [its] losses as well as the way in which the special damages resulted from the allegedly false publication.” Schoen v. Wash. Post, 246 F.2d 670, 672 (D.C. Cir. 1957). Here, Dominion alleges that Giuliani made defamatory statements about its involvement in the 2020 election, that the people who believed those statements made threats to Dominion employees and board members, and that those threats required Dominion to spend more than $565,000 on private security to protect its employees. Giuliani Compl. ¶ 126. Although Giuliani contends that Dominion may satisfy Rule 9(g) only by “identifying either particular customers whose business has been lost or facts showing an established business and the amount of sales before and after the disparaging publication, along with evidence of causation,” Browning v. Clinton, 292 F.3d 235, 245 (D.C. Cir. 2002), the cases he cites merely provide examples of how a plaintiff may specifically state pecuniary harm and demonstrate that those harms resulted from defendant’s conduct. In its Complaint against Giuliani, Dominion alleges that it suffered economic harm in the form of additional expenses that it would not have incurred if not for Giuliani’s alleged defamation, as well as the loss of future contracts. See also Giuliani Compl. ¶¶ 128 (noting that Dominion has incurred $1,170,000 in expenses to mitigate harm to reputation and business); id. ¶ 135 (projecting lost profits of $200 million over the next five years when reduced to present value).25 Dominion has also alleged how those losses resulted from Giuliani’s defamatory statements. Id. ¶¶ 106–32. The Complaint therefore alleges lost profits with adequate specificity and survives Giuliani’s Motion to Dismiss.

There will be more proceedings to come in these cases. They are important cases for anyone interested in legal ethics.

Ed Clinton, Jr.

http://www.clintonlaw.net

Law Firm Lacks Standing To Sue Client’s Insurer For Fees

The moral of the story here is: get it in writing if you wish to collect your legal fees.

The opinion in Mintz Fraade Law Firm, P.C. v. Federal Insurance Co., 2021 2021 NY Slip Op 02607, Appellate Division, First Department is short and to the point. The key language:

Plaintiff law firm lacks standing to recover its legal fees under the insurance policy, to which it is not a named party (Miller & Wrubel, P.C. v Todtman, Nachamie, Spizz & Johns, P.C., 106 AD3d 446 [1st Dept 2013]). Plaintiff was merely an “incidental beneficiary to its client’s malpractice insurance policy” (id.). Thus, the motion court properly found that plaintiff’s sole recourse was against the insured, its client, and not its client’s insurance provider.

Plaintiff’s argument that it had a direct contract with defendant on account of the various correspondence between itself and one of defendant’s employees also fails. Indeed, these letters merely confirm, consistent with the policy’s requirement that the insurer’s consent of the insured’s choice of counsel not be “unreasonably withheld,” that defendant consented to the insured’s continued retention of plaintiff.

Lawyer’s Lawsuit Against Online Reviewer Is Dismissed

One piece of advice I give consistently to lawyers is to ignore any negative reviews. If you respond substantively, you might disclose a confidence and subject yourself to discipline. Accept the bad review as a badge of honor and work on productive matters. The case of Gurstein v. Doe, No. 352225, Michigan Court of Appeals (Unpublished) addresses another issue: whether the lawyer can sue for libel.

According to the opinion, a “John Doe” posted a one star review of the law firm. The review contained no text. Gurstein sued for libel. The trial court dismissed the lawsuit and the Court of Appeals affirmed that decision.

The reasoning:

“We conclude that, as a matter of law, a one-star wordless review posted on Google Review is an expression of opinion protected by the First Amendment. Edwards, 322 Mich App at 13. We have previously held that “[t]he context and forum in which statements appear also affect whether a reasonable reader would interpret the statements as asserting provable facts.” Ghanam, 303 Mich App at 546 (quotation marks and citations omitted). In the context of Internet message boards and similar opinion-based platforms, statements “are generally regarded as containing statements of pure opinion rather than statements or implications of actual, provable fact . . . .

Indeed, the very fact that most of the posters [on Internet message boards] remain anonymous, or pseudonymous, is acue to discount their statements accordingly.” Id. at 546-547 (quotation marks and citations omitted). As plaintiffs note, Google Review is an online consumer review service where posters can share their subjective experience with, among other things, a business, a professional, or a brand. We therefore conclude that Google Review is no different than the[I]nternet message boards in Ghanam; that is, it contains purely a poster’s opinions, which are afforded First Amendment protection.Plaintiffs, however, argue Doe 2’s one-star Google review was a defamatory statement by implication. Plaintiffs assert that “Google review is an [I]nternet-based consumer review service” where individuals can post reviews of a business or professional on the basis of their actual experience; therefore, by posting a wordless one-star Google review, the poster implies that his or her experience with that business was a negative one. Because Doe 2 failed to establish that he or she was a prospective, former, or current client, plaintiffs contend that the review is defamatory as it was implied that Doe 2 had an actual attorney-client experience and received legal services from plaintiffs. But plaintiffs fail to establish how Doe 2’s one-star review was materially false. American Transmission, Inc, 239 Mich App at 702. Indeed, plaintiffs do not even know Doe 2’s true identity. While plaintiffs urge this Court to assume Doe 2 is a competitor-attorney because Doe 1 was identified as such, this is mere speculation without any factual basis.

Similarly, plaintiffs argue Doe 2 was only permitted to post a review that evaluated their attorney-client experience with plaintiffs. Google’s policy states that “content should reflect [the poster’s] genuine experience at the location and should not be posted just to manipulate a place’s ratings.” Because Google’s policy does not limit aposter’s experience to an attorney-client experience, it could reflect any experience with plaintiffs, including their website, physical location, blogs, in-court interactions, or appearance. Accordingly, even if Doe 2’s wordless one-star Google review was “couched in opinion,” it was not actionable defamation because it contained a subjective rating of plaintiffs’ business without any further words or statements describing that experience. Such a review could not imply an assertion of objective fact, but onlyan opinion, that is protected under the First Amendment. Ghanam, 303 Mich App at 545.

Therefore, the trial court did not err in concluding that the wordless one-star Google review was incapable of defamatory meaning as a matter of law. See Thomas M Cooley Law Sch, 300 Mich App at 269-270; Ghanam, 303 Mich App at 529.”

It is unfortunate that lawyers overreact to negative reviews. Don’t do it. It isn’t worth it and nothing good will come of a complaint about a negative review. I would encourage a lawyer to ignore this review and spend your time on productive matters.

Should you have a question about a legal ethics issue, do not hesitate to contact us at 312-357-1515.

Reciprocal Discipline For Violations of Rule 1.9

The District of Columbia Circuit has imposed reciprocal discipline on Larry Klayman for violations of Rule 1.9. Klayman, who at one time worked at Judicial Watch, represented clients who were adverse to Judicial Watch. The opinion sets forth the facts in this fashion:

“Larry Klayman founded Judicial Watch in 1994 and served as its general counsel until he left in 2003. Since then, he has worked as “a public interest attorney and advocate.” Br. 13.

Following the filing of a complaint with the District of Columbia Bar in 2013, the Bar’s Hearing Committee Number Nine concluded that Mr. Klayman violated Rules 8.4(d) and 1.9 of the District of Columbia Rules of Professional Conduct.

See Report and Recommendation, In re Klayman, No. 13-BD-084, slip op. at 2 (D.C. Bd. of Prof. Resp. Hearing Comm. June 19, 2017). Rule 1.9 provides that “[a] lawyer who has formerly represented a client in a matter shall not thereafter represent another person in the same or a substantially related matter in which that person’s interests are materially adverse to the interests of the former client unless the former client gives informed consent.” D.C. Rule of Professional Conduct 1.9. According to the comments to Rule 1.9, the relevant “matter” is not limited to litigation: “[w]hen a lawyer has been directly involved in a specific transaction, subsequent representation of other clients with materially adverse interests clearly is prohibited.” Id. The D.C. Bar complaint against Mr. Klayman focused on his representation of three clients in suits against his former employer, Judicial Watch.

The first client, Sandra Cobas, served as director of Judicial Watch’s Miami Regional Office. While there, Cobas alleged that she faced a hostile work environment, and Mr. Klayman, as general counsel, advised Judicial Watch about her complaints. After ending her employment with Judicial Watch, Cobas filed suit against the organization in Florida state court. The Florida court dismissed her complaint, calling it “silly and vindictive.” In re Klayman, 228 A.3d 713, 716 (D.C. 2020) (internal quotation marks omitted). Then, after Mr. Klayman left Judicial Watch and without seeking its consent, he entered an appearance on Cobas’s behalf and filed a motion asking the court to vacate its order of dismissal. When the motion was denied, Mr. Klayman initiated and briefed an appeal. The appellate court affirmed the dismissal.

The second client was Louise Benson, from whom Mr. Klayman, while serving as Judicial Watch’s chairman and general counsel, solicited a commitment to donate $50,000 for a fund to purchase a building. She made an initial payment of $15,000, but Judicial Watch ultimately did not purchase a building. Years later, after Mr. Klayman had left Judicial Watch, Benson sued the organization, seeking the return of her donation. She was initially represented by another attorney, but Mr. Klayman later entered an appearance as co-counsel, again without seeking consent from Judicial Watch. Judicial Watch asked Mr. Klayman to withdraw, pointing out that he had “organized the fundraising effort” and that “Benson had identified him as a fact witness.” Id. When Mr. Klayman failed to withdraw, Judicial Watch moved to disqualify him, but the motion was never resolved because the parties agreed to dismiss the case.

Last is Peter Paul. Judicial Watch represented Paul with respect to several legal issues, including an investigation and potential litigation arising from Paul’s fundraising activities during his campaign for the New York State Senate. On behalf of Judicial Watch, Mr. Klayman prepared the representation agreement and authorized its signing as well as a subsequent modification. Judicial Watch lawyers later represented Paul in a civil lawsuit in California state court. After Mr. Klayman left Judicial Watch, the organization’s lawyers withdrew from the representation. Paul then sued Judicial Watch in the United States District Court for the District of Columbia, alleging that the organization’s lawyers had breached the representation agreement. Although Paul was initially represented by other counsel, Mr. Klayman later entered an appearance—again without seeking Judicial Watch’s consent.

Judicial Watch moved to disqualify Mr. Klayman, and the district court, then-Chief Judge Royce Lamberth, granted the motion. Paul v. Judicial Watch, Inc., 571 F. Supp. 2d 17, 27 (D.D.C. 2008). He first concluded that “it [wa]s clear that Mr. Klayman’s representation of Mr. Paul” was an “unambiguous violation” of Rule 1.9. Id. at 21. The representation, Judge Lamberth explained, was “the very type of `changing of sides in the matter’ forbidden by Rule 1.9.” Id. (quoting D.C. Rule of Professional Conduct 1.9). And although “not unsympathetic” to the prejudice that Paul might suffer due to Mr. Klayman’s disqualification, Judge Lamberth explained that he “simply [could not] condone such a flagrant violation of a Rule of Professional Conduct essential to the proper functioning of our system of justice.” Id. at 27.

Following a hearing, Hearing Committee Number Nine found that “Mr. Klayman violated Rule 1.9 (or its Florida equivalent) in all three” representations. In re Klayman, 228 A.3d at 717. The Hearing Committee also found that Mr. Klayman’s representation of Paul violated Rule 8.4(d), which prohibits lawyers from “[e]ngag[ing] in conduct that seriously interferes with the administration of justice.” Lastly, it found that Mr. Klayman gave false testimony before the Hearing Committee. The Committee recommended that Mr. Klayman “be suspended for ninety days, with reinstatement contingent upon a showing of his fitness to practice law.” Id.

The Board on Professional Responsibility agreed that Mr. Klayman had violated Rule 1.9 and recommended that he “be suspended for ninety days.” Id. The Board, however, “disagreed with the Hearing Committee’s finding that Disciplinary Counsel proved a violation of Rule 8.4(d),” as well as with its finding that Mr. Klayman had “provided false testimony,” and it rejected the Hearing Committee’s reinstatement condition. Id.

In the District of Columbia Court of Appeals, Mr. Klayman chose not to challenge the Board’s conclusion that he had violated Rule 1.9. See id. at 717 (“Before this court, neither Mr. Klayman nor Disciplinary Counsel takes issue with the finding that Mr. Klayman violated Rule 1.9 or its Florida equivalent.”). On June 11, 2020, the Court of Appeals accepted the Board’s findings; suspended Mr. Klayman for ninety days, effective July 11, 2020; and required that he complete a continuing legal education course on conflicts of interest as a condition of reinstatement.

Under Rule X of this court’s Rules of Disciplinary Enforcement, Mr. Klayman was obligated to “notify the Clerk of this Court in writing within ten days of such discipline”— his suspension by the D.C. Court of Appeals. D.C. Cir. Rules, App. II, Rule X. He failed to do so.

On July 24, this court received notice from the D.C. Court of Appeals of Mr. Klayman’s ninety-day suspension. See Certified Copy of Order, In re Klayman, No. 20-8511 (D.C. Cir. Aug. 4, 2020). Almost two weeks later, on August 4, we ordered Mr. Klayman to “show cause . . . why the imposition of identical discipline by this court would be unwarranted.” Order, In re Klayman, No. 20-8511 (D.C. Cir. Aug. 4, 2020). In response, Mr. Klayman filed the brief now before us. Mr. Klayman was reinstated to the District of Columbia Bar effective December 10, 2020….

Because Mr. Klayman has failed to carry his “burden of showing why the court should not impose reciprocal discipline,” In re Sibley, 564 F.3d at 1340, we shall impose a ninety-day suspension. Mr. Klayman protests that he “has already served a 90-day suspension period,” claiming that from August 12 to December 18, he made no appearances in the D.C. Circuit. Br. 15.

This argument rests on a flawed assumption: that our ninety-day suspension will apply nunc pro tunc to the date when the D.C. Court of Appeals imposed its suspension. Although we sometimes do impose reciprocal discipline retroactively, we do so only in limited situations, such as where the attorney, pursuant to Disciplinary Rule X, promptly notifies this court of the discipline imposed, and/or refrains from representing clients in this court while suspended before another court. Mr. Klayman did neither.

When asked at oral argument why he had failed to notify the court pursuant to Rule X, Mr. Klayman offered no coherent explanation. See Oral Arg. Tr. 10-12. In a self-styled “Supplement to Respondent’s Initial Brief,” filed just after oral argument, Mr. Klayman told us that “[t]he reason that he did not immediately inform” this court of his suspension “was because” his petitions for rehearing and rehearing en banc of his suspension “were pending [in the D.C. Court of Appeals] at the time and Mr. Klayman believed that he would be successful in obtaining a favorable ruling.” Supplement to Respondent’s Initial Br. 2. This is an astonishing argument. Rule X is crystal clear: “an attorney admitted to practice before this Court” who is “subjected to public discipline for professional misconduct. . . shall so notify the Clerk of this Court in writing within ten days of such discipline.” See Disciplinary Rule X (emphasis added). “Shall” means shall, and, unsurprisingly, the rule contains no exceptions for lawyers who think they might successfully challenge their discipline on appeal.

With respect to the second basis for considering imposing discipline retroactively—voluntary withdrawal from practice before this court—Mr. Klayman failed to withdraw from representing three clients until after we issued our order to show cause. See Motion to Withdraw as Counsel, Luhn v. Scott, No. 19-7146 (D.C. Cir. Aug. 10, 2020); Motion to Withdraw as Counsel, Lovelien v. United States, No. 19-5325 (D.C. Cir. Aug. 12, 2020); Motion to Withdraw as Counsel, Corsi v. Mueller,No. 19-5314 (D.C. Cir. Aug. 12, 2020). Indeed, Mr. Klayman failed to mention one of those cases in his brief, see Br. 15, and even filed a brief on behalf of one client two days after his D.C. suspension took effect, see Appellants’ Final Reply Br., Lovelien v. United States, No. 19-5325 (D.C. Cir. July 13, 2020).

For the foregoing reasons, Larry Klayman is suspended from practice before this court for ninety days, effective as of the date of this opinion and the accompanying order. Mr. Klayman is prohibited from holding himself out to be an attorney at law licensed to practice before the United States Court of Appeals for the District of Columbia Circuit during the suspension. In addition, pursuant to Disciplinary Rule II(d), this matter is referred to the Committee on Admissions and Grievances for recommendations about any further discipline warranted by Mr. Klayman’s failure to comply with Rule X.

So ordered.

Comment: should you have a question or concern about a legal ethics issue or matter, I am available to assist you. My email is ed@clintonlaw.net. We can be reached at 312-357-1515.

https://www.clintonlaw.net/legal-ethics.html

New York Appellate Division Suspends Lawyer For Varsity Blues Conviction

The Respondent was a well-known attorney and a chairman of a large law firm. Unfortunately, he became involved with Rick Singer and paid Singer to enable his child to get preferential treatment on a college entrance examination. He was indicted, pleaded guilty and served one month in prison and did 250 hours of community service. The New York Appellate Division suspended him for two years. The lawyer obtained a terrific result from the Appellate Division. Disbarment was certainly a possibility. His decision to plead guilty and accept responsibility was undoubtedly helpful to his cause.

The explanation is as follows:

Respondent cooperated with the AGC and has no disciplinary history. He testified how he disgraced his family and his firm, how he betrayed his former partners, colleagues and his [*4]profession, and he acknowledged that he had several chances to reconsider the wrongness of what he was doing. When asked how he reconciled his statement to Singer that he was not concerned about the moral issue of what he was doing with the person who he thought he was, respondent stated —

“it’s an anathema to me . It’s an enormous disappointment to me that that’s where my head was at .It doesn’t matter how I got there. It doesn’t matter what I was thinking . It was just abhorrent. I always thought I’d be the guy who would hang up on something like this . But when I was tested in this instance, I went for it.

* * *

“This was hubris. It was arrogant. It was about me, not about my child. That took a lot of self-realization. It was deep insecurity, I think. I frankly think a lot of people in my former profession have this notion of having to

prove yourself all the time. It overwhelmed me and it destroyed my life. I destroyed my life.”

The Referee noted that the record itself showed that respondent’s criminal actions were “out of character with his professional life and his desire to make amends.” Respondent presented his pre-sentencing memorandum with some 70 letters of support from, among others, family, friends, former colleagues and Greenwich policemen, all of which showed “the breadth and depth of Respondent’s extensive pro bono activities, his help to others in need, his millions of dollars in financial contributions and hours of personal service to Fordham Law School and Cornell University and his numerous acts of generosity and kindness throughout his career.” Respondent became well known in the legal community, writing articles and presenting at conferences; he was named “Dealmaker of the Year” by American Lawyer in 2018; and he became more involved with Fordham Law School, providing contributions and becoming a member of the Dean’s Advisory Planning Council, for which he was recognized in 2016 with a public service award.

At the hearing, the former Chairman of the law firm where he worked testified that, inter alia, he had worked with respondent for nearly 20 years and knew him quite well due to their management positions, and there was “universal respect and affection” for him. He explained that anybody who knows respondent saw his misconduct as “a real aberration, understood by everyone to be an act of zealousness and protectiveness for his daughter. But it doesn’t change anybody’s views who know him as to his reputation.” The founder of Publicolor testified to respondent’s extensive financial and hands on involvement with the organization assisting struggling schools and their students in poorer neighborhoods in New York City with advancing their education. This included serving as a Board member for 10 years (5 years as Chairman), until he was charged with the subject crime, painting with the kids, and being a mentor to many of the high school students. Even after he resigned from the Board, respondent continued to mentor students.

Recalling [*5]his one-month incarceration respondent testified that it was “deeply, humbling, extraordinarily eye-opening” “horrific on many levels” and it “changed my life forever. I don’t know for better or for worse, but it’s definitely changed the way I view life.” During his incarceration he conducted continuing education seminars for other inmates on their lives after prison and how to start and run a business and met with them individually to make sure they understood the materials. In prison respondent “was a kind, caring, and humble man deeply contrite about his actions and earnestly seeking forgiveness and redemption” who “never minimized his conduct or attempted to shift the blame to someone else” and “desire[d] to atone by helping others at Loretto [prison]”, with several inmates commenting that “his seminar transformed their own post-release plans.”

Prior to his misconduct most of his charitable work was “ironically enough” with education; however, following his experience in prison, respondent wanted to work with an organization that helps inmates and their families and so his community service work was with the Aleph Institute based in Los Angeles which provides “social and religious services focused around the needs of prisoners and their families.”

Since his immediate suspension and release from prison, respondent has been getting his “own house in order” and has been working on business issues related to companies regarding negotiations and investing or strategy around transactions.

In considering a proper sanction, the Referee noted that, as respondent admitted before the sentencing judge, “[t]his was not a victimless crime. The real victims are the kids and the parents who played by the rules in the college admissions process.”

The Referee also considered the importance of “[t]he attorney’s attitude toward the obligations and duties implicit in taking the oath of office” and “notice to the profession that certain conduct will not be tolerated” (Matter of Nearing, 16 AD2d 516, 518 [1st Dept 1962]). The Referee found respondent’s “deep and genuine” remorse “expressed over and again” —

“from his allocution at his sentencing in Federal court, his [EUO] before the Committee and the hearing, and from observing his forthright demeanor at the hearing, it is clear that Caplan has learned his lesson — painfully and traumatically. It is difficult, if not impossible, to imagine Caplan ever again deliberately crossing the line and acting criminally or unethically.”

However, the Referee suggested that the mitigation could not obscure the purpose of the proceedings, “the protection of the public” and imposing a sanction —

“Respondent was at the very top [of] the legal profession in June 2018 when he had his first conversation with Rick Singer. He was co-chair of one of the country’s leading law firms, he had a large and extremely remunerative law practice, he was highly respected by all. Despite all that, when faced with a clear ethical choice, he failed [*6]badly. He knew in that first conversation that Singer was proposing “cheating” the college admissions process. But rather than hanging up the phone, Caplan said yes, signing onto an illegal, criminal scheme that brought shame to himself and to his family.

“In making that choice, Caplan completely disregarded his professional and civic duties. Rather, he used his skills as a lawyer and the rewards of his successful law practice to circumvent the rules, not to honor them, to try to protect himself against the consequences of his clearly ethical and criminal conduct, rather than to choose to avoid any such behavior.

“In these circumstances, the balancing test this proceeding requires weighs against a shorter suspension, but not so heavily, given the weight and consequences of the lessons Caplan has learned, as to require disbarment. I recommend that Caplan be suspended for a period of two years, retroactive to the date of the Appellate Division suspension order of November 7, 2019.”

The AGC now moves for an order confirming the findings of fact, conclusions of law and recommendation of the Referee to impose a two-year suspension, nunc pro tunc to November 7, 2019 (date of his interim suspension) in this “serious crime” proceeding. Although he urged a one-year suspension before the Referee, respondent has submitted a separate Memorandum of Law in support of the Committee’s request for a two-year suspension and provides a detailed presentation of the evidence in mitigation and case precedent. In view of all of the foregoing, and that the purpose of this proceeding is to protect the public as opposed to punishment (Matter of Samuel, 103 AD3d 134, 137 [1st Dept 2013]), the Referee’s report including the sanction recommendation is confirmed.

Within weeks of his arrest, respondent pleaded guilty to conspiracy to commit mail fraud and honest services mail fraud (18 USC § 1349 [see 18 USC §§ 1341 and 1346]), a federal felony, for his participation in a scheme which involved two trips to California and extended for eight months until he was arrested. Almost immediately respondent accepted full responsibility for his criminal and unethical wrongdoing and expressed sincere remorse, not only in court and in public, but to essentially anyone he came into contact with. His honesty about his failings, his shame and the devastating consequences his criminal behavior has had on his personal and professional lives was palpable in his testimony before the sentencing judge, before the AGC (in his EUO) and before the Referee. Respondent’s years of mentoring people from all walks of life and participation in charitable and pro bono activities was not done for appearances but involved a substantial commitment of his time and effort, not just financial. Indeed, the numerous letters submitted on his behalf describe the positive impact respondent has had on people’s lives spanning decades, and not just with family and friends but with acquaintances and even strangers. [*7]Even the Committee acknowledges that his character evidence is “impressive” and that “there is little reason to believe that he will engage in similar criminal conduct.”

Nonetheless, it is clear that respondent’s focus at the time was not on the immorality and illegality of his actions but on not getting caught, and he continued with the scheme despite numerous opportunities to walk away. Although no case is directly on point, this Court has faced somewhat similar matters where attorneys have engaged in deceptive conduct and/or bribery resulting in discipline ranging from suspension to disbarment (Matter of Davis, 109 AD3d 154 [1st Dept 2013]; Matter of Bertel, 268 AD2d 112 [1st Dept 2000]; Matter of Holtz, 239 AD2d 24 [1st Dept 1998]; Matter of Stone, 230 AD2d 481 [1st Dept 1997]; Matter of Goldberg, 190 AD2d 269 [1st Dept 1993]; Matter of Lefkowitz, 105 AD2d 161 [1st Dept 1984]).

Additionally, in the 1990’s there were several misdemeanor commercial bribery/scheme to defraud cases involving attorneys who participated in the “ten percenter” bribery scheme in which they paid insurance adjusters to influence the handling of insurance claims, resulting in sanctions ranging from censure to disbarment (see e.g. Matter of Kreitzer, 281 AD2d 35 [1st Dept 2001], lv denied 97 NY2d 609 [2002]; Matter of Fields, 280 AD2d 104 [1st Dept 2001]; Matter of Rotter, 241 AD2d 81 [1st Dept 1998]; Matter of Ingber, 239 AD2d 58 [1st Dept 1998]).

A two-year suspension retroactive to his 2019 suspension properly balances respondent’s criminal conduct with the substantial evidence in mitigation, the protection of the public, maintaining the honor and integrity of the profession and as a deterrence to others from committing similar misconduct (22 NYCRR 1240.8 [b][2]).

Accordingly, we grant the AGC’s motion to confirm the Referee’s findings of fact, conclusions of law and recommendation, and respondent is suspended from the practice of law in the State of New York for a period of two years, nunc pro tunc to November 7, 2019, and until further order of the Court.

All concur.