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

Lawyer Held In Contempt For Refusing To Follow Court Orders

Eisenberg v. Swain, No. 19-cv-189, District of Columbia Court of Appeals began modestly with an effort by the attorney (Eisenberg) to collect fees owed to him from his client. He obtained a judgment and garnished $1499 in wages. After that he learned that the former client had filed a bankruptcy petition. The Superior Court entered certain orders against the attorney as follows:

The Superior Court ordered Mr. Eisenberg to return the garnished wages to Ms. Swain until a decision was reached on whether his judgment against her was included in the bankruptcy discharge. Mr. Eisenberg did not comply. The Superior Court then issued an order that included three rulings: (1) it ruled that Ms. Swain’s debt to Mr. Eisenberg had been discharged, (2) it held Mr. Eisenberg in contempt of court for his failure to return the garnished wages, and (3) it rejected Mr. Eisenberg’s request to add Ms. Swain’s bankruptcy attorney as a defendant in the underlying breach of contract case after Mr. Eisenberg alleged that Ms. Swain’s attorney had conspired with her to defraud Mr. Eisenberg.

Usually when a debtor files a bankruptcy petition, there is an automatic stay of all collection proceedings against the debtor. In this case the trial court understood the bankruptcy stay applied and ordered Eisenberg to return the garnished wages to the debtor until the bankruptcy had been adjudicated. The lawyer then refused to do so and was held in contempt. He then apparently attempted to add the debtor’s bankruptcy attorney to the case. The trial court rejected this request and Eisenberg appealed. The DC Court of Appeals affirmed.

Eisenberg’s appeal of the contempt order was rejected on several grounds. The relevant portion of the Court’s opinion is quoted below:

Mr. Eisenberg challenges Judge Pan’s contempt ruling and associated sanctions. Mr. Eisenberg’s actions in this litigation justified holding him in contempt. We affirm the trial court’s judgment on this ground as well.

Mr. Eisenberg was ordered to return $1,499 to Ms. Swain on November 17, 2016. His motion to stay the return of these funds was denied on February 23, 2017. Despite twice receiving clear instruction from the court to return $1,499 to Ms. Swain, Mr. Eisenberg had not returned the funds when he appeared before the court on December 3, 2018, more than two years after the initial order, and nearly two years after his motion to stay return of the funds was denied. When questioned by the trial court on the reasons for his noncompliance, Mr. Eisenberg said only, “I believe the judgment was actually void given the history that we have gone through,” adding later that he believed “federal law” superseded the Superior Court’s authority and that Judge Pan had relinquished jurisdiction over the issue. When asked why, given these beliefs, he had not filed a motion to reconsider, Mr. Eisenberg responded that he “wasn’t aware that was an option.” At other points during this exchange, however, Mr. Eisenberg represented that he kept the funds in his trust account because “Ms. Swain had been resistant and deceptive, and [he] wanted to make sure [he] preserved [his] property” and that “those monies were [his], and … since they were in dispute … [he] left them in the trust account.” These alternating and seemingly self-serving rationales left Judge Pan with the well-founded impression that after receiving a ruling he did not like, Mr. Eisenberg “just did what [he] wanted to do” and that his actions were “[n]ot in good faith.” Judge Pan issued an order to show cause why Mr. Eisenberg should not be held in contempt and requested briefing from both parties.

At a second hearing, held on February 25, 2019, Judge Pan questioned Mr. Eisenberg and Ms. Swain on their positions regarding contempt. In conjunction with this questioning, Judge Pan asked Ms. Swain to detail the expenses she had incurred as a result of not having the $1,499 returned to her. These included moving expenses after Ms. Swain was unable to pay her rent and had to relocate, as well as time spent litigating the issue in Superior Court. In a written order issued on March 1, 2019, Judge Pan held Mr. Eisenberg in contempt of court and ordered him to pay compensatory damages to Ms. Swain in the amount of $978.22.[5]

Superior Court judges have express authority to “punish for disobedience of an order or for contempt committed in the presence of the court.” D.C. Code § 11-944(a) (2012 Repl.) In addition to its statutorily derived authority, the court retains a well-established power to punish for contempt that is “inherent in the nature and constitution of a court … arising from the need to enforce compliance with the administration of the law.” Brooks v. United States, 686 A.2d 214, 220 (D.C. 1996) (citation and quotation marks omitted). The decision whether to hold a party in civil contempt is confided to the sound discretion of the trial judge, and will be reversed on appeal only upon a clear showing of abuse of discretion. In re T.S., 829 A.2d 937, 940 (D.C. 2003).

In challenging the trial court’s contempt ruling, Mr. Eisenberg advances three arguments: (1) that the Superior Court did not have substantive jurisdiction over the garnished funds, (2) that the underlying order was vague and ambiguous as to when the money had to be returned to Ms. Swain, and (3) that, for a variety of ill-supported reasons, his actions could not be deemed contemptuous. Each argument is meritless.

Mr. Eisenberg claims that the Superior Court lacked substantive jurisdiction over the garnished wages, rendering the underlying order requiring him to return the money to Ms. Swain void. While it is true that “[v]oidness of a court order is an absolute defense to a contempt motion,” an order is void for lack of jurisdiction only when the issuing court is “powerless to enter it.” Kammerman v. Kammerman, 543 A.2d 794, 799 (D.C. 1988) (citation omitted). Mr. Eisenberg asserts that the Superior Court did not have substantive jurisdiction over the disputed funds because they were under the exclusive jurisdiction of the bankruptcy court. As explained in detail above, he is wrong about that. Because Mr. Eisenberg’s debt was unscheduled, the funds at issue were subject to the concurrent jurisdiction of the Superior Court. See, e.g., In re Rollison, 579 B.R. at 72-73.

Mr. Eisenberg also argues that any substantive jurisdiction the Superior Court may have had was nonetheless waived by Judge Pan’s statement in the order that she was “not in a position to evaluate the merits of plaintiff’s motion to dismiss defendant’s bankruptcy.” Mr. Eisenberg relies heavily on this statement, alleging in his brief that the Superior Court “at the time chose to relinquish its jurisdiction over the disputed money as it pertained to the [federal bankruptcy law] issue and send it to [the bankruptcy court].” Mr. Eisenberg advances this interpretation despite the immediately preceding sentence in the order, which reads, “[Mr. Eisenberg] is not entitled to garnishment at this time, and it would be unjust to allow [Mr. Eisenberg] to retain defendant’s money pending the outcome of [Ms. Swain]’s bankruptcy matter,” and the immediately following sentence, which reads, “[t]he Court, therefore, denies plaintiff’s motion to stay the order releasing garnishment.” In the context of the order as a whole, Mr. Eisenberg’s suggestion that Judge Pan expressly relinquished jurisdiction over the garnished funds is patently unreasonable.[6]

We likewise reject Mr. Eisenberg’s assertion that the order was vague because it did not list a date by which the funds had to be returned. Nothing in the record suggests a genuine confusion on Mr. Eisenberg’s part about when the return of funds was required. To the contrary, in Mr. Eisenberg’s motion to stay the return of the garnished funds, he acknowledged that the court had “ordered the moneys be returned to Ms. Swain,” but specifically requested that the order be stayed “pending the exhaustion of his legal remedies.” In her order denying this motion, Judge Pan stated that it would be unjust to allow Mr. Eisenberg to keep the money “pending the outcome of defendant’s bankruptcy matter” and ordered the funds returned. To the extent that there was any ambiguity in the initial order, it is clear from the ensuing litigation that the order contemplated the prompt return of the funds during the pendency of the bankruptcy matter. Under any interpretation of the language of the order, a delay of two years—during which time Mr. Eisenberg actively pursued his claims in both bankruptcy court and the Superior Court—is clearly not contemplated. Finally, “the proper response to a seemingly ambiguous court order is not to read it as one wishes.” Loewinger v. Stokes, 977 A.2d 901, 907 (D.C. 2009). If a party subject to a court order genuinely does not understand its requirements, he may “apply to the court for construction or modification.” Id. To fail to take such steps is “to act at one’s peril as to what the court’s ultimate interpretation of the order will be.” Id. (quoting D.D. v. M.T., 550 A.2d 37, 44 (D.C. 1988)).

The court of appeals also rejected the attempt to add the bankruptcy lawyer as a defendant.

Mr. Eisenberg argues that the trial court erred in denying his motion to join Ms. Swain’s bankruptcy attorney, Mr. Moses, in the underlying breach of contract action. According to Mr. Eisenberg, Mr. Moses should have been joined as a party because he and Ms. Swain “conspired to defraud [Mr. Eisenberg] of moneys they knew were not dischargeable through bankruptcy.” Mr. Eisenberg does not assert that the trial court was required to join Mr. Moses under Super. Ct. Civ. R. 19, but that it erred in not joining him under Super. Ct. Civ. R. 20, governing permissive joinder. Rule 20 allows for the joinder of a defendant where any “right to relief is asserted against them jointly, severally, or in the alternative with respect to or arising out of the same transaction, occurrence, or series of transactions or occurrences” and “any question of law or fact common to all defendants will arise in the action.” Super. Ct. Civ. R. 20(a)(2). Superior Court Civil Rule 20 is largely identical to Rule 20 of the Federal Rules of Civil Procedure. See Super. Ct. Civ. R. 20 cmt.; Fed. R. Civ. P. 20. As with its federal counterpart, we will review rulings on permissive joinder only for an abuse of discretion. See, e.g., Mosley v. Gen. Motors Corp., 497 F.2d 1330, 1332 (8th Cir. 1974) (“[T]he scope of the civil action is made a matter for the discretion of the district court, and a determination on the question of joinder of parties will be reversed on appeal only upon a showing of abuse of that discretion.”).

Mr. Eisenberg has not proffered any factual basis tying Mr. Moses to Mr. Eisenberg and Ms. Swain’s initial representation agreement, to the settlement agreement, or any other set of events relevant to the original contractual dispute in Superior Court. As the trial court noted, the contract dispute was already resolved in Superior Court with a full judgment in Mr. Eisenberg’s favor and the case was reopened for the limited purpose of addressing the discharge of debt. If Mr. Eisenberg believes he has a non-frivolous claim against Mr. Moses arising out of the proceedings in bankruptcy court, the proper course of action is to initiate a separate lawsuit. It is no basis to join Mr. Moses in the breach of contract case against Ms. Swain.

Comment: Deciding to defy a court order is a serious matter that should not be undertaken lightly. In my opinion, a lawyer should not subject himself to contempt proceedings in a dispute over his own legal fees. The decision to defy a court order should be undertaken only when the client’s important rights are at stake, such as preserving the attorney-client privilege or preserving the client’s 5th Amendment rights.

Should you have a question on an ethics issue, do not hesitate to call me.

Ed Clinton, Jr.

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

Court Dismisses Lawsuit Against Legal Ethics Publisher

On May 1, 2020, the federal district court for the Southern District of New York dismissed a lawsuit filed by Andrew Straw (a lawyer currently suspended from the practice of law in the State of Indiana) against Wolters Kluwer, a legal publisher. (20 CV 3251 S.D. NY). Straw claimed that the publisher violated his rights under the Americans with Disabilities Act by citing to an opinion disciplining him. The relevant parts of the opinion are quoted here:

Plaintiff contends that “[t]he book ridiculed me by making me seem totally incompetent just for asking [for] this information[. I]t seems the only information the defendants relied upon was the Indiana discipline order, In Re Straw, 68 N.E.3d 1070 (Ind. 2/14/2017).” (Id. at ¶ 46). He states that “the language [to which he] object[s] concerns [his] bogus Indiana Supreme Court discipline.” (Id. at ¶ 20).

In that disciplinary action, In Re Straw, 68 N.E.3d 1070 (Ind. 2017), cert. denied sub nom. Straw v. Ind. Supreme Court, 137 S. Ct. 2309 (2017), the Indiana Supreme Court suspended Plaintiff from the practice of law for violations of Indiana Professional Conduct Rule 3.1, which prohibits bringing a proceeding or asserting an issue unless there is a nonfrivolous basis in law and fact.[1] Plaintiff asserts that the publisher “should have asked me before ridiculing me,” and that “this blistering attack in a major book on legal ethics cannot stand.” (Id. at ¶ 47.) Plaintiff also rehashes arguments that he made in his suspension proceedings and elsewhere that his suit against the ABA was not frivolous because he did not seek to collect private data but rather sought to amend “form 509” in order to collect information about disability, in addition to race and gender. (Id. at ¶ 49).[2]

Plaintiff styles this action as a suit under “Title II/Title V” of the ADA, alleging that the publisher and its employees retaliated against him for his having filed the disability discrimination suit, Straw v. ABA., No. 14-CV-0519 (N.D. Ill. 2015), which is one of the suits that was deemed frivolous and was part of the basis for his suspension from the practice of law in Indiana. Plaintiff invokes “42 U.S.C. § 12203 and 28 C.F.R. § 35.134 [which] prohibit[s] retaliation by anyone.” (ECF 2 at 16, ¶ 60). He argues that “[r]epublishing the vicious attacks … amount to additional retaliation and collusion with that state supreme court.” (Id. at ¶ 62)……

“To state a claim for retaliation under the ADA …, a plaintiff must show: (i) he or she was engaged in protected activity; (ii) the alleged retaliator knew that plaintiff was involved in protected activity; (iii) an adverse decision or course of action was taken against plaintiff; and (iv) a causal connection exists between the protected activity and the adverse action.” Patrick v. Success Acad. Charter Sch., Inc., 354 F. Supp. 3d 185, 226 (E.D.N.Y. 2018) (addressing retaliation in the public services context) (citing Lawton v. Success Acad. Charter Sch., Inc., 323 F. Supp. 3d 353, 366 (E.D.N.Y. 2018) (quoting Weixel v. Bd. of Educ., 287 F.3d 138, 148 (2d Cir. 2002))); see also Sarno v. Douglas Elliman-Gibbons & Ives, Inc., 183 F.3d 155, 159 (2d Cir. 1999) (“[I]t is appropriate to apply the framework used in analyzing retaliation claims under Title VII in analyzing a claim of retaliation under the ADA.”).

Generally, “any activity designed “to resist or antagonize …; to contend against; to confront; resist; [or] withstand” discrimination prohibited by Title VII constitutes a protected oppositional activity.” Littlejohn v. City of New York, 795 F.3d 297, 317 (2d Cir. 2015) (quoting Crawford v. Metropolitan Government of Nashville & Davidson Cnty., 555 U.S. 271, 276 (2009)). Here, however, Plaintiff fails to plead any facts that could satisfy the third element of a retaliation claim. Publishing a book that accurately reports the Indiana state court’s disciplinary decision against Plaintiff, even if he continues to dispute the court’s decision, does not qualify as taking adverse action against Plaintiff.

Nor does Plaintiff plead any facts that could give rise to an inference that his suspension decision was used as an illustration in a book on legal ethics because of retaliatory animus against Plaintiff for his opposition to disability discrimination. Because Plaintiff fails to plead facts suggesting any causal connection between his ABA suit opposing discrimination and any adverse action against him, Plaintiff fails to state a claim that any Defendant retaliated against him in violation of his rights under the ADA.”

The court also rejected a claim for intentional infliction of emotional distress.

Ed Clinton, Jr.

Note: Andrew Straw is a member of the bar of the State of Virginia and is currently in good standing.

Wisconsin Declines To Admit Lawyer Who Was Disbarred in Florida

In the Matter of the Bar Admission of David Hammer, 2019AP1974 (Supreme Court of Wisconsin, June 25, 2020), The Wisconsin Supreme Court refused admission to David Hammer who was previously denied admission in Florida. Given the prior misconduct of Hammer in Florida, culminating in disbarment, the Supreme Court of Wisconsin refused to admit Hammer.

¶3 We focus on the Board’s primary reason for declining to certify Mr. Hammer. On August 23, 2010, four years after his admission to practice law, the Supreme Court of Florida issued an emergency suspension against Mr. Hammer’s law license, alleging that he had misappropriated client trust funds. A formal disciplinary complaint followed. Eventually, Mr. Hammer stipulated that in November 2009, Bilzerian had directed that certain outstanding invoices and cost reimbursements not be paid to Mr. Hammer. Mr. Hammer believed these amounts were valid and owed to him. At the time, Mr. Hammer had access to funds in a trust account belonging to another Bilzerian-related entity. In January 2010, Mr. Hammer began taking money from that trust account for his own personal use. In May 2010, the client requested the money held in trust. By then, the trust fund was approximately $27,000 short of funds. To replace the missing client funds, Mr. Hammer accessed funds from another account to which he was a signatory, paying himself director fees and other amounts.

¶4 On August 30, 2011, the Florida Supreme Court issued an order disbarring Mr. Hammer, nunc pro tunc to September 22, 2010, for misappropriating client funds.[2] Eventually, Mr. Hammer distanced himself from the Bilzerian client group, started a business, regained financial stability, and became chief information officer of Elevant, an entity that licenses a case management software program.

¶5 On January 1, 2018, Mr. Hammer applied for admission to the Wisconsin bar. In February 2018, he took and subsequently passed the Wisconsin bar exam. On January 15, 2019, the Board advised Mr. Hammer that his bar application was at risk of being denied on character and fitness grounds. Mr. Hammer, by counsel, requested a hearing and in May 2019, Mr. Hammer also voluntarily commenced an ethics tutorial with Wisconsin Attorney Dean R. Dietrich.

¶6 On August 2, 2019, the Board conducted a hearing at which Mr. Hammer appeared by counsel and testified. The Board also heard testimony from Mr. Hammer’s prospective employers, who advised the Board that they will employ Mr. Hammer as an attorney if he is admitted to the Wisconsin bar. Attorney Dietrich testified in support of Mr. Hammer’s character and fitness to practice law in Wisconsin.

¶7 On September 19, 2019, the Board issued an adverse decision concluding that Mr. Hammer had failed to demonstrate to the Board’s satisfaction that he has the necessary character and fitness to practice law in Wisconsin. The Board cited Mr. Hammer’s Florida disbarment; abuse of process; extensive traffic record; and its conclusion that Mr. Hammer failed to demonstrate significant rehabilitation. The Board added that Mr. Hammer has not reapplied to the Florida bar.

¶23 While we have, on occasion, overruled the Board and admitted certain applicants despite troubling past conduct, we conclude that Mr. Hammer cannot be admitted to their ranks. We acknowledge that a decade has passed since the misconduct culminating in Mr. Hammer’s Florida disbarment and that Mr. Hammer cannot undo his past misconduct. This conundrum does not mean, however, that we are somehow compelled to offer him a law license. While the passage of time may aid a bar applicant’s case, nothing in our prior bar admission cases should be construed to imply that an applicant enjoys a presumption of admission after some period of time has elapsed. Lathrop v. Donohue, 10 Wis. 2d 230, 237, 102 N.W.2d 404, 408 (1960) (observing that the practice of law is not a right but a privilege).

¶24 With the serious nature of his misconduct, coupled with the number of incidents revealing deficiencies (BA 6.03(d), (i)), Mr. Hammer has created a very heavy burden for himself. In such cases the passage of time may not be sufficient to persuade us that an applicant should be admitted to the practice of law.

¶25 Based on our own review of the non-erroneous facts of record before the Board at the time of its decision, we agree that Mr. Hammer has failed to meet his burden under SCR 40.07 to establish the requisite moral character and fitness to practice law “to assure to a reasonable degree of certainty the integrity and the competence of services performed for clients and the maintenance of high standards in the administration of justice.”[10] Accordingly, we affirm the Board’s decision declining to certify Mr. Hammer for admission to the Wisconsin bar.

¶26 IT IS ORDERED that the decision of the Board of Bar Examiners declining to certify that David E. Hammer has satisfied the requirements for admission to the practice of law in Wisconsin is affirmed.

The opinion also discussed several contempt findings against Mr. Hammer.

Dry Cleaning Lawsuit Results in 90-Day Suspension

This case was covered in the news media. it has now resulted in a 90-day suspension from the practice of law. In re Roy L. Pearson, No. 18-BG-586, June 4, 2020, District of Columbia Court of Appeals. Pearson sued his dry cleaner alleging that the dry cleaner lost a pair of his pants. The sanctions resulted from his approach to the litigation. The facts are summarized in part:

The allegations of misconduct arise from the litigation culminating in Pearson v. Chung, 961 A.2d 1067 (D.C. 2008).[2] In that case, Pearson sued three defendants (Soo Chung, Jin Nam Chung, and Ki Y. Chung) who jointly owned and operated Custom Cleaners, a dry cleaning business. Id. at 1069. The dispute originated with Pearson’s allegation that the Chungs lost a pair of pants that he had brought to Custom Cleaners for alterations. Pearson initially demanded $1,150 in compensation. He then filed a lawsuit in the Superior Court claiming that defendants had violated the District of Columbia Consumer Protection Procedures Act, D.C. Code §§ 28-3901 to -3913 (2013 Repl. & 2019 Supp.) (“CPPA”), and committed common law fraud, negligence, and/or conversion. Pearson’s claims rested on his interpretation of three signs in the Chungs’ store: “Satisfaction Guaranteed,” “Same Day Service,” and “All Work Done on Premises.” In the initial complaint, he sought at least $15,000 in compensation for emotional distress and $15,000 in punitive damages from each defendant.

Pearson’s demands for compensation escalated dramatically as the case went on. His claims for emotional damages increased to $3,000,000 by trial. He asserted that he was entitled to $90,000 to obtain a rental car so he could travel to a different dry cleaner in the city. He claimed that he had expended 1,200 hours of work on the matter, worth $500,000 in attorney’s fees. He sought prospective relief requiring the Chungs to pay him $10,000 within twenty-four business hours if he notified them that they were not providing him with acceptable service.[3] His damages theories often included multiplying his claims by three (for each defendant), by two (for his separate statutory and common law claims), by three (for treble damages under the CPPA), by three (for each sign), by seven (for each CPPA subsection allegedly violated), and/or by every single day that a particular sign had been on display within the statute of limitations (under his theory that each day represented a separate violation of the statute and was independently compensable). By the time the Joint Pre-Trial Statement was filed, Pearson claimed that he was owed more than $67,000,000 in compensatory and punitive damages.

Pearson’s theories of liability likewise expanded — or at least were clarified as being extremely expansive — as the litigation progressed. In his motion for partial summary judgment, Pearson claimed that the “Satisfaction Guaranteed” sign represented “an unconditional and unlimited guarantee of satisfaction, as a matter of law” (emphasis in original) so that any customer who claimed dissatisfaction, regardless of whether the claim was made in good faith, could demand any compensation whatsoever. Custom Cleaners would then have to meet that demand, no matter what it was, in order to resolve the customer’s dissatisfaction. Pearson testified at trial that this would include situations in which the Chungs — or any other provider — knew that the customer was lying and/or when the customer demanded an exorbitant amount of money, such as a trillion dollars. Respondent’s theories regarding the other two signs were similarly expansive. For example, in his trial brief, Pearson listed as an “undisputed fact” that the “Same Day Service” sign meant that “any customer request for any of defendants’ service would be completed the same day” (emphasis in original). The trial court granted judgment for the Chungs on this claim as a matter of law because Pearson’s “Same Day Service” theory was “completely unreasonable,” failing to consider any other factors, such as when customers dropped off the clothes, how many items they wanted serviced, what kind of services they were requesting, and whether customers asked for or even desired same day service.

As the case progressed, the trial court repeatedly expressed concerns about Pearson’s characterizations of case law, statutes, and the court’s own orders. In one instance, the court pointed out that Pearson had misquoted a case, attempting to imply that it had involved an identical “Satisfaction Guaranteed” sign. The court reminded Pearson that he had “an obligation to the Court to be accurate in the representations you make with regard to what cases are about.” Pearson initially conceded that he had misquoted the case and apologized, but later filed a “Correction,” attempting to rescind that admission, because he claimed that there was no “rational basis for distinguishing the meaning of the term `unconditional guarantee’ from the meaning of the term `satisfaction guaranteed’ . . . . In plaintiff’s view, . . . the two terms are indistinguishable in substance and meaning.”[4]

The Hearing Panel and the District of Columbia Court of Appeals concluded that Pearson violated Rules 3.1 and 8.4(d). Rule 3.1 prohibits the lawyer from bringing frivolous litigation. The original claim (for the lost pants) was not frivolous. The theories of liability and the enormous demands for damages were frivolous. The explanation:

In this case, the Board took care to explain that “[a]ttorneys in the District of Columbia should not fear discipline for making aggressive and creative arguments.” It emphasized that “[f]rivolous is more than ultimately meritless, and the good faith exception to a Rule 3.1 violation allows a wide range of creative and aggressive challenges to existing law” (internal quotation marks omitted). But the Board also explained that, while a Rule 3.1 violation may not have been clear at the outset, “[a]s his lawsuit progressed, Respondent’s liability and damages arguments morphed into the preposterous.” It was “the entire course of Respondent’s extreme conduct over the course of the suit,” not a showing “that the claims were frivolous when first made,” that convinced the Board that Pearson had violated Rule 3.1.

We agree that this distinction is crucial and that, as his theories expanded and his tactics grew more extreme, respondent failed to comply with his continuing responsibility to conduct an objective evaluation of the merits of his claims. Yelverton proves instructive. The attorney in that case “filed numerous repetitive and unfounded motions in Superior Court and in this court, and . . . twice asked the trial judge to recuse himself from the case when he lacked any objective reason to do so.” 105 A.3d at 426. The Board found that Pearson’s motions and discovery practices were similarly repetitive — both during the initial litigation and during this disciplinary proceeding — and that his unfounded allegations of bias against Judge Kravitz were strikingly similar to the motion to disqualify in Yelverton.[8] These conclusions are well supported by the record.

Pearson’s liability and damages claims compounded the mischief of his motions and discovery practice. Pearson protests that his liability claims cannot fairly be deemed frivolous, as he survived summary judgment and a motion to dismiss and was allowed to proceed to trial. The trial court also opted not to sanction him. But, while relevant, those decisions are not dispositive of whether the legal theories ultimately were frivolous.[9] Pearson’s claims continually expanded throughout litigation and his liability and damages theories became more clear — and more outlandish — as the case progressed. As noted above, the trial court granted judgment as a matter of law rejecting Pearson’s claims based on the “Same Day Service” sign. In light of the entire record, surviving summary judgment cannot be taken as a dispositive ruling that Pearson’s theories had legal support. Instead, as noted by the trial court and quoted by the Board, once Pearson’s legal theories “clearly were articulated,” they “were unsupported in fact or in law.”

It is also true that, as a technical matter, some of Pearson’s theories presented a matter of first impression. But the lack of a definitive holding precluding a legal theory does not mean that it cannot be frivolous.[10] “Were this not the case, a patently frivolous but novel legal argument — `novel,’ perhaps, because no litigant would dream of bringing it with a straight face — would not be sanctionable.” Ozee v. Am. Council on Gift Annuities, Inc., 143 F.3d 937, 941 (5th Cir. 1998). We agree with the Board that this is one such case. The total damages figure is shocking in itself; simply put, Pearson asked the trial court to award him $67,292,000 because of his dissatisfaction with defendants’ dry cleaning services. But the constituent parts of that $67,292,000 total are equally troubling. Pearson asked for $90,000 to rent a car, a facially disproportionate request in response to the alleged need to patronize another dry cleaner. He claimed that his emotional distress over a few common and innocuous signs and a lost pair of pants was so severe that he was entitled to $3,000,000 in damages. Perhaps most remarkable was his request for a judgment obligating the Chungs to provide him with ongoing services and to pay him $10,000 immediately based on nothing more than his own request, a demand that the Hearing Committee called “patently non-cognizable,” was made after the defendants had already taken down the signs at the heart of the controversy, was tethered to no statutory basis, and was completely out of proportion to any likely shortcoming in dry cleaning service. These damages theories were utterly frivolous, implausible to the point of having “not even a faint hope of success,” and they violated Rule 3.1. Spikes, 881 A.2d at 1125 (internal quotation marks omitted).

We agree with the Board that Pearson’s theories of liability also violated Rule 3.1. Under Pearson’s interpretation of the signs in question, “customers” acting in bad faith could bankrupt any business in the District with such a commonplace sign, as he acknowledged no requirement of good faith by the customer, no limitation on the demands the customer could make, and no allowances for “basic common sense.” Pearson v. Chung, 961 A.2d at 1075. Pearson did not make the required objective inquiry into whether his liability claims had even a faint hope of success. Instead, he did the opposite, steadfastly refusing to acknowledge contrary legal authority, engaging in extensive puffery, and pressing his preferred interpretations of the signs even after they were rebuffed by his own witnesses at trial. Indeed, even in his filings in this disciplinary case, he has continued to refer to his theories as “indisputable.” As the Hearing Committee noted, “Respondent has never, to this day, made the requisite objective appraisal.”

The court also found a violation of Rule 8.4(d) which prohibits interference with the administration of justice. A 90 day suspension was ordered.

Comment: should you have a legal ethics question, do not hesitate to call me to discuss it. My number is 312-357-1515, Extension 1.

http://www.clintonlaw.net

ARDC Claims That Lawyer Created Websites To Make False Statements About A Judge

Note: this is a complaint filed by the ARDC. The allegations are not proven. There has been no trial and no opportunity to defend the case. The ARDC obtained the factual basis for its allegations from, presumably, a subpoena to Godaddy, an internet provider. The ARDC also placed the lawyer under oath so that the lawyer was required to answer the questions. (Because this is a complaint, I have not included the respondent’s name in this post.)

The Complaint’s main allegations are quoted below:

1. On or about September 11, 2018, Respondent purchased the domain name “firetheliarjudge.com” from GoDaddy, and used GoDaddy to create a website for “firetheliarjudge.com”.

2. Respondent created the firetheliarjudge.com website as part of an anti-retention campaign against Judge Andrew Gleeson, the Chief Judge of the 20th Judicial Circuit, who was running for retention in the November 6, 2018 general election.

3. Respondent linked the firetheliarjudge.com website to a Facebook page entitled “Madeline M. Dinmont”. Madeline M. Dinmont was a fictitious name created and used by Respondent.

4. In or around October 2018, Lori Friess (“Friess”) organized an anti-retention campaign against another judge in the 20th Judicial Circuit, Judge Zina Cruse. Friess called the campaign “Justice For Kane”, in recognition of her two year-old grandson, Kane Friess-Wiley, who had been killed in April 2017. Friess’ daughter’s former boyfriend, Gyasi Campbell (“Campbell”), had been charged with Kane’s murder. On April 2, 2018, Judge Cruse reduced Campbell’s bond from $1 million to $150,000 which allowed Campbell to post bond and be released from custody pending trial.

5. On or around October 4, 2018, Respondent posted the following entry on the firetheliarjudge.com website:

A FAILURE TO VOTE IS A YES VOTE ON RETENTION!

Kane’s founder has a vendetta against a judge who followed the law.

Why Judge Gleeson Must Go!

Judge Zina Cruse is a female African American Judge from East St. Louis. The Justice For Kane anti-retention campaign is the brain child of Gleeson & others to run a female minority judge off the bench in order to preserve their white male privilege.

6. Respondent’s statements described above, that the Justice For Kane anti-retention campaign was the “brain child” of Judge Gleeson and others and Judge Gleeson wanted to run a female minority judge off the bench to preserve his white male privilege was false because Judge Gleeson had no involvement in the Justice For Kane group or any group or effort seeking to remove Judge Cruse from the bench.

7. Respondent knew her statements described in paragraph 5, above, were false at the time she made them and posted them to the firetheliarjudge.com website or she made them with reckless disregard as to their truth or falsity.

8. On or about October 4, 2018, Respondent posted the following entry on the firetheliarjudge.com website:

JFK [Justice For Kane] is a WHITE SUPREMACIST GROUP!

JKF is a front for a WHITE SUPREMACIST GROUP called the National Association for Majority Equality which Judge Gleeson supports. That is why they are targeting judges of color and that is why their members ares [sic] exclusively white.

9. Respondent’s statement that Judge Gleeson supports a white supremacist group called the National Association for Majority Equality (“NAME”) was false because Judge Gleeson did not support or have any involvement with NAME or any white supremacist group or with the Justice For Kane campaign.

10. Respondent knew her statement described in paragraph 8, above, was false at the time she made it or she made it with reckless disregard as to its truth or falsity.

11. By reason of the conduct outlined above, Respondent has engaged in the following misconduct:

  1. making statements the lawyer knows to be false or with reckless disregard as to their truth or falsity concerning the qualifications or integrity of a judge, adjudicative officer, or public legal officer by making the statements set forth in paragraphs 5 and 8, above, in violation of Rule 8.2(a) of the Illinois Rules of Professional Conduct (2010).

COUNT II
(False and or reckless statements about the qualifications or integrity of a judge
on Facebook page entitled “Madeline M. Dinmont”)

The Administrator realleges and incorporates paragraphs 1 through 10, of Count I above.

12. On or before September 14, 2015, Respondent created a Facebook page entitled “Madeline M. Dinmont” (“Dinmont page”). Respondent used the fictious name Madeline Dinmont in her interactions with GoDaddy concerning the firetheliarjudge.com website.

13. On or about October 5, 2018, Respondent posted the following entry on the Dinmont page:

Gleeson is part of the St. Clair County Secret Order of the
 Hibernians. That’s why he uses the Irish clover. Wanna [sic]
 guess how many of its members are persons of color? None.
Wanna [sic] see Gleeson in his “chief” regalia?

Respondent then posted a photograph of a Klu Klux Klansman dressed in a white robe and hood with the name tag “Gleeson” pinned to his chest over an Irish clover. The picture also depicted a noose and a confederate flag and was captioned “Vote No Retention!” (see Exhibit 1 attached)

14. Respondent’s posts described in paragraph 13, above, were false because Judge Gleeson was not a member or part of a “secret order of the Hibernians”, he was not a member of the Klu Klux Klan, and the person depicted by Respondent on the Dinmont page was not Judge Gleeson.

15. Respondent knew her postings described in paragraph 13, above, were false at the time she made them or she made them with reckless disregard as to their truth or falsity.

16. By reason of the conduct outlined above, Respondent has engaged in the following misconduct:

  1. making statements the lawyer knows to be false or with reckless disregard as to their truth or falsity concerning the qualifications or integrity of a judge, adjudicative officer, or public legal officer by making the statements set forth in paragraph 13, above, in violation of Rule 8.2(a) of the Illinois Rules of Professional Conduct (2010).

COUNT III
(False statements to the Administrator)

The Administrator realleges and incorporates paragraphs 1 through 15, of Counts I and II above.

17. On July 2, 2019, Respondent appeared at the Springfield ARDC office to provide sworn testimony related to matters described in this complaint.

18. During the sworn statement, Respondent was asked the following questions and gave the following answers:

Q: Okay. What do you know about the website firetheliarjudge.com?

A: It was a website set up for the anti-retention campaign

Q: And who set it up?

A: I don’t know.

Q: What role did you have in creating either the website or the domain name?

A: I was asked how you go about setting up a domain name and I suggested that they go through GoDaddy.

Q: When you say you were asked, who asked you?

A: Judge Duebbert.

Q: Okay. So did Judge Duebbert set up this website firetheliarjudge.com?

A: I don’t know if he did it or if he had somebody else do it.

Q: You had no involvement in setting up the site?

A: No, and I didn’t manage it either.

Q: Have you ever posted anything to the site firetheliarjudge.com?

A: No.

19. Respondent’s statement above that she did not know who set up the firetheliarjudge.com website was false because Respondent set up and paid for the website through GoDaddy.

20. Respondent’s statement above that she did not manage the website was false because she managed the website, she linked it to the Dinmont page and she linked it to another website she created entitled “firejudgegleeson.com”.

21. Respondent’s statement above that she never posted anything on the firetheliarjudge.com website was false because she made posts on the website, including the conduct described in Counts I and II in this complaint.

22. Respondent knew that her statements described in paragraphs 19 through 21, above, were false at the time she made them.

23. During the sworn statement on July 2, 2019, Respondent was asked the following questions and gave the following answers:

Q: Okay. So my question is with regard to these entries on firetheliarjudge.com, did you have anything to do with creating, making, or responding to these entries?

A: No. I tried to help them set it up and then it was taken over by somebody who was a non-lawyer.

Q: Okay. And when you said you tried to help them set it up, who are you talking about?

A: Well, the people that were involved in the anti-retention campaign by telling them you can go to GoDaddy and they have templates, that kind of thing.

Q: Okay. And who was that? Who specifically are you talking about?

A: It was Judge Duebbert and his web person.

Q: Who was that?

A: I don’t know. I don’t even know when this was set up.

Q: Were you the domain – did you own the domain name firetheliarjudge.com?

A: No.

Q: Did you set it up?

A: No, but I tried to help them set it up.

Q: Well, specifically what does that mean?

A: To get into GoDaddy and set up an account.

Q: But you didn’t set up the account at GoDaddy?

A: No, nor did I have control over it.

Q: Do you know what e-mail address they used when they set up the firetheliarjudge.com?

A: I don’t.

Q: Do you know if they used Madeline Dinmont’s e-mail address?

A: I don’t know.

24. Respondent’s statement above that she had no role in creating, making or responding to entries on the website firetheliarjudge.com was false because she did create the website and she did make various postings to the website as described in Counts I and II above.

25. Respondent’s statements above that she did not know when the website firetheliarjudge.com was set up and that she did not own the domain name “firetheliarjudge.com” were false because she set up and paid for the domain name and website firetheliarjudge.com through GoDaddy on or about September 11, 2018.

26. Respondent’s statements above that she did not set up or “have control” over the firetheliarjudge.com website were false because Respondent set up and controlled the domain name and website using her GoDaddy account.

27. Respondent knew that her statements described in paragraphs 24 through 26, above, were false at the time she made them.

28. By reason of the conduct outlined above, Respondent has engaged in the following misconduct:

  1. knowingly making a false statement of material fact in connection with a disciplinary matter by making the false statements described in paragraphs 19 through 21 and 24 through 26, above, in violation of Rule 8.1(a) of the Illinois Rules of Professional Conduct (2010); and
  2. conduct involving dishonesty, fraud, deceit, or misrepresentation by making the false statements described in paragraphs 19 through 21 and 24 through 26, above, in violation of Rule 8.4(c) of the Illinois Rules of Professional Conduct (2010).

COUNT IV
(False or reckless statements about the qualifications or integrity of a judge – GoDaddy)

The Administrator realleges and incorporates paragraphs 1 through 27, of Counts I, II and III above.

29. On September 17, 2018, Respondent contacted GoDaddy customer service concerning the website firetheliarjudge.com. Respondent identified herself to the operator as Madeline Dinmont. Respondent also identified herself as the administrator of the website firetheliarjudge.com.

30. During the telephone conversation, Respondent told the operator that she wanted to pay for the firetheliarjudge.com website through PayPal on a “month to month” basis because she would not need the site to be operational after the November 5, 2018 general election.

31. During the telephone conversation, the following exchange occurred:

Operator: That’s why you want to go month to month?

Respondent: Yeah.

Operator: Makes sense,

Respondent: Because the election will be over the 5th.

Operator: Yeah. And you hope these people read it and do the right thing, right?

Respondent: If only you knew.

Operator: I was glancing through the website, so I hear you.

Respondent: No. I mean, it’s not a very nice person [Judge Gleeson]. And he’s done a lot of things to hurt a lot of people. So that’s part of the reason that we’re getting all the crank calls.

Operator: That’s too bad.

Respondent: You know, this part of the United States, politics is a blood sport.

Operator: True.

Respondent: I mean, I will tell you how evil it is. They’ve attempted to set up another judge of a different political party for murder if that tells you anything.

Operator: Wow.

Respondent: And this is the guy who orchestrated it.

Operator: That’s crazy.

Respondent: So we had the Department of Justice in here. No, I’m not kidding you.

Operator: You wonder how people like that stay elected.

Respondent: Well, that’s what we’re working on. And frankly, I’ve never practiced law in a jurisdiction where it was like this.

32. Respondent’s statements in paragraph 31, above, that Judge Gleeson “orchestrated” an attempt to set up another judge for murder were false because Judge Gleeson never engaged in the conduct which Respondent described to the operator.

33. Respondent knew her statements in paragraph 31, above, were false or she made them in reckless disregard of their truth or falsity.

34. By reason of the conduct outlined above, Respondent has engaged in the following misconduct:

making statements the lawyer knows to be false or with reckless disregard as to their truth or falsity concerning the qualifications or integrity of a judge, adjudicative officer, or public legal officer by making the statements set forth in paragraph 31, above, in violation of Rule 8.2(a) of the Illinois Rules of Professional Conduct (2010).

West Virginia Suspends Criminal Lawyer for 120 Days for Failing To Meet Appeal Deadlines

The case is captioned Lawyer Disciplinary Board v. Sayre, 18-0617, West Virginia Supreme Court. Sayre represented a client in a case where the client was convicted of attempted murder. Sayre missed several deadlines in the appeal process. The court set forth the facts as follows:

The events that led to Mr. Sayre’s conduct underlying this disciplinary proceeding first originated in 2016 when Mr. Sayre was appointed to be counsel in a criminal matter arising in Wood County. An order adjudging Mr. Sayre’s client guilty upon a jury verdict of guilty to the offense of second-degree murder was entered by the Circuit Court of Wood County on March 14, 2016. Mr. Sayre and another attorney were then appointed as appellate counsel. On March 15, 2016, Mr. Sayre filed a request for transcripts in the case. Three days later, he filed a notice of appeal with the Supreme Court of Appeals of West Virginia. A scheduling order was entered by the Supreme Court of Appeals of West Virginia on April 1, 2016, setting the deadline for perfecting the appeal as July 15, 2016.

Mr. Sayre did not perfect the appeal before the deadline. On July 22, 2016, a notice of intent to sanction was entered by this Court, directing him to perfect the appeal within ten days and show good cause as to why the appeal was not timely perfected. On August 9, 2016, Mr. Sayre filed a motion to extend the deadline and requested an additional sixty days to perfect the appeal, noting that he had received the trial transcript within the past thirty days. His motion was granted, and the deadline for perfecting the appeal was extended to September 15, 2016.

Mr. Sayre filed two more motions to extend the deadline to perfect the appeal—both of these motions were untimely. In his motion dated September 16, 2016, he requested an additional sixty days to perfect the appeal and asserted that he had not been able to completely review the transcripts or obtain feedback from his client to complete the brief. This motion was granted, and he was ordered to perfect the appeal on or before October 17, 2016. Later, on October 26, 2016, he filed another motion to extend, citing an overload of appointed work and a recent illness, and advised that he would have the appeal perfected by October 28, 2016. Mr. Sayre did not file the appeal by October 28, 2016, and the Court entered another notice of intent to sanction on November 4, 2016, directing him to file the brief within fifteen days, and show cause as to why the appeal was not perfected timely. Mr. Sayre filed his brief on January 4, 2017. This Court considered the appeal on the merits and issued a unanimous decision affirming the order sentencing Mr. Sayre’s client.

Sayre was found to have engaged in the violations of the following rules:

A Statement of Charges was issued against Mr. Sayre, and filed with this Court on July 9, 2018. It set forth the following alleged violations of the West Virginia Rules of Professional Conduct: Rules 1.1[6] and 1.2(a)[7] for failure to provide competent representation to his clients consistent with their stated objectives of timely pursuing appeals; Rule 1.3[8] for failure to diligently pursue his clients’ appeals; Rules 1.4(a)[9] and 1.4(b)[10] for failure to adequately keep his clients informed and for failure to communicate; Rule 3.2[11] for failure to make efforts to expedite appeals consistent with the desires of his clients; Rules 3.4(c)[12] and 8.4(d)[13]because he repeatedly violated the Rules of Appellate Procedure by failing to comply with multiple orders issued by the Supreme Court of Appeals of West Virginia

Sayre was also charge with exchanging text messages of a sexual nature with another criminal client. This was found to violate Rule 1.8(j) and 8.4(a).

South Carolina Suspends Criminal Lawyer For Six Months For Instructing Client’s Friend To Move Evidence

A South Carolina criminal defense attorney was suspended for six months by the South Caroline Supreme Court for making an unlawful (immoral) communication to her client’s girlfriend. Essentially, the lawyer instructed the client’s girlfriend to move certain United States currency to another location. The opinion describes the facts in this way:

On February 27, 2019, Respondent entered a plea of no contest to the charge of unlawful communication in violation of S.C. Code Ann. § 16-17-430(A)(1) (2015). The facts of the plea indicated that, on December 13, 2017, Respondent willfully and unlawfully conveyed “an immoral message while in a telephonic communication with an individual.” Specifically, while meeting with one of her criminal clients who was in custody related to a narcotics trafficking case, Respondent instructed the client’s girlfriend to remove United States currency and paperwork from the bathroom of the client’s home and take the currency and paperwork to an associate of the client. Respondent was sentenced to one day in jail with credit for one day served.

In the matter of Melisa White Gay, No. 27899, South Carolina Supreme Court (July 3, 2019).

The unlawful communication encouraged a friend of a criminal defendant to move evidence. No doubt the police correctly believed that the lawyer was doing more than just legal work.

The general principle to remember is that the lawyer is an advocate – not a coach who tells a client to hide evidence. Lawyers should not be giving clients “advice” of this sort. Indeed, telling the client to move something may constitute obstruction of justice.

Edward X. Clinton, Jr.