Tuesday, June 24, 2014

More comments on the role of lawyers in the GM debacle and the connection with the need for less secrecy in litigation

News and comments regarding General Motors keep piling up and none of it is good for the automaker. You can go to my Torts blog fore more information and links, but the important aspect of the debate here relates to the role of the lawyers involved and the on-going debate about the need to control secrecy in litigation.  Here are a few links.

June 14: Richard Zitrin (UC Hastings):  Secret settlements fueled GM's latest ethical inferno
June 18: NY Times: GM CEO faces criticism in House hearings (includes short video)

June 19:  Painter and Zitrin:  GM's general counsel and CEO should resign or be fired

June 24:  John Steele (Legal Ethics Forum): Update on the proposed sunshine in litigation act 

Monday, June 23, 2014

Update on the story of the judge and prosecutor who were disciplined for engaging in a personal relationship during trial

About two weeks ago I posted a note about a judge in Florida who was disbarred because, while serving as the presiding judge in a capital first-degree murder case, the judge commenced a significant emotional relationship with the lead prosecutor in the case. The prosecutor, on the other hand, was only suspended for two years.  There is more information on the story here and here.

Sunday, June 15, 2014

New York City Bar Association issues opinion on virtual offices

The New York City Bar Association’s Committee on Professional Ethics has issued an opinion (2014-02) on the use of virtual law offices. The Legal Ethics Forum has more.

Calls To Reform Wisconsin Attorney Discipline

The Legal Profession blog has an article on calls to reform the disciplinary system in Wisconsin.

The role of lawyers in the GM debacle

The debacle surrounding GM's car recalls, lawsuits and corporate culture has generated a great debate on issues related to torts, safety, litigation, the use of bankruptcy protection, alternative compensation funds and the role of lawyers.  Sadly, much of the debate shows we (whatever you interpret "we" to mean - society, lawyers, judges, regulatory agencies) have not learned important lessons from the past.   You really should take a few minutes and go to the following sites to read up on the issues (and make sure you read the comments too):

The Legal Ethics Forum reports (with links) that GM has fired lawyers as a result of an investigation.

Link to the report prepared by a lawfirm for GM.

"Shades of Enron: the Legal Ethics Implications of the General Motors Scandal"

New York Times article:  "G.M. Lawyers Hid Fatal Flaw, From Critics and One Another"

Richard Zitrin explains the connection between secrecy in litigation and the current issues

The PopTort on GM corporate culture

How not to practice law: if you are a judge, start a relationship with the prosecutor in the case; if you are cited to a disciplinary proceeding, show up in shorts and a t-shirt; if you like someone you interviewed, send her "sexting" messages.

Here are three recent stories to add to the on-going list of "how not to practice law" posts:

1. While serving as the presiding judge in a capital first-degree murder case, Gardiner commenced a significant emotional relationship with the lead prosecutor in the case.  Story here and here.   Interestingly, the prosecutor was only suspended for two years.  Why disbar the judge but not the prosecutor?

2.  Show Up For Your Disciplinary Hearing In Shorts, T-Shirt And Running Shoes.  Story here.

3.  Sext.

Wednesday, June 4, 2014

Illinois Review Board issues opinion that suggests minor sanction is in order for misappropriation if there was a good reason to misappropriate

Although there are always exceptions, misappropriation of client's funds will almost always result in disbarment.  This is certainly true in Illinois, where almost every year misappropriation ranks as one of the top types of misconduct that results in disbarment.  And this is a not a bad thing.  If you steal money from your client you should be disbarred. Period; end of story.  That is what I teach my students.  But, like I said, there are always exceptions.  The hard question is what are the reasons for which we should make an exception.

This is why I was surprised to read about this decision of the Illinois Review Board recommending a mere 30-day suspension for a case of misappropriation because the Board apparently thought the misappropriation was done for "sympathetic reasons."

I understand that every case is different and that the Board should consider arguments in favor of mitigation, but it always troubles me when a decision seems to suggest that there are good reasons to steal and bad reasons to steal and that you will not get in serious trouble if you steal for a good reason. Aside from going against the vast majority of the cases on the issue, this type of reasoning sets a bad policy.

In particular, the court considered as a mitigating factor the fact that the client was not aware that the lawyer had misappropriated the funds.  Again, I understand that the Board is essentially saying that the client was not harmed by the misconduct, but what it says can also be interpreted to mean that the better the lawyer is in hiding the misconduct from the client, the lesser the sanctions should be.  This does not make much sense to me.

I think the opinion should be reversed and a stronger sanction should be imposed.  

Podcast: Has the Promise of Gideon v. Wainwright Been Fulfilled?

Last year we celebrated the 50th anniversary of Gideon v. Wainwright and there was a lot of discussion on the state of access to legal representation in criminal cases.  I posted a series of links to many of the articles and debates around the internet here, here, here, here and here. Now, about a year after the first of those posts, the Legal Talk Network's podcast channel Lawyer2Lawyer has posted this a new podcast on the subject.

Update on the story regarding Oregon's decision to consider intra-firm consultation protected under attorney-client privilege

Bernard A. Burk, Assistant Professor of Law Faculty Fellow, Parr Center for Ethics University of North Carolina School of Law, wrote to me in response to my original post with a couple of important points:

1.  There is a line of federal district and bankruptcy court decisions in the 90s and 2000s denying or limiting the privilege under similar circumstances. The cases reason, more or less, that internal consultation with firm counsel regarding the firm's rights and duties vis-à-vis a client, at least while the engagement continues, violates the firm's fiduciary duty of loyalty and thus should not be shielded by the attorney-client privilege. They cases include (among others) In re Sunrise Sec. Litig., 130 F.R.D. 560, 595 (E.D. Pa. 1989); Koen Book Distributors v. Powell, Trachtman, Logan, Carrie, Bowman & Lombardo P.C., 212 F.R.D. 283 (E.D. Pa. 2002); Bank Brussels Lambert v. Credit Lyonnais (Suisse) S.A., 220 F.Supp.2d 283 (S.D. N.Y. 2002); SonicBlue Claims LLC v. Portside Growth & Opportunity Fund Ltd. (In re SONICBlue Inc.), No. 03-51775, Bloomberg law Citation: 2008 BL 15488 (Bankr. N.D. Cal. Jan. 18, 2008); Thelen Reid & Priest LLP v. Marland, No. C 06-2071 VRW, 2007 BL 226352 (N.D. Cal. Feb. 21, 2007). There are all kinds of reasons why, in my humble opinion, the earlier federal decisions are poorly reasoned and implement bad policy. But the issue has been current a lot longer than some may think, and until recently was regularly decided the other way.

2. The ABA House of Delegates recently adopted a resolution supporting the decisions in Georgia and Massachusetts.

Thanks to Bernie for the updates!

Are legal services "unaffordable"?

A few days ago, The Atlantic published an article titled Is There Such a Thing as an Affordable Lawyer?  The article argues that the monopoly on legal services by lawyers results in legal services becoming overpriced and unaffordable.  I agree that legal services are expensive and that many people in need of services can't afford them, but the story upon which the article is based did not provide the best support for the argument according to comments in the Legal Ethics Forum and My Shingle

Court of Appeals for the 7th Circuit decides case on conflicts in class action representation

Yesterday, the Court of Appeals for the 7th Circuit dismissed a settlement agreement reached in a class action case citing a laundry list of what it said were conflicts of interest on the part of the plaintiff lawyers and inequities in the agreement itself, which the court called "scandalous."  “Class counsel sold out the class,” Judge Richard A. Posner wrote for a three-member panel of the court. The case is called Eubank v. Pella Corp.  and the opinion is available here.  The Legal Ethics Forum has links to comments on the story here

Unfortunately, issues of inequities in class action representation are not a new problem.  Richard Zitrin and Carol Langford have a very good chapter on the subject in their book "The Moral Compass of the American Lawyer."

New Jersey Appellate Court holds that a convicted criminal defendant does not have to show innocence to support a malpractice claim (if the defendant pleaded guilty)

As I have discussed previously (more recently herehere and here), a majority of jurisdictions hold that a convicted criminal defendant does not have a right to sue his or her trial attorney for legal malpractice unless the plaintiff can show he or she was innocent of the crime.  However, there are a few jurisdictions (last time I checked it was four) that have decided there is no need to show actual innocence.

A new case from New Jersey addressed the issue and found no need to show actual innocence while suggesting the requirement should still apply to most cases.  The court tries to make a distinction; but I don't buy it.

In this case, Cortez v. Gindhart, the defendant pleaded guilty to criminal charges but later brought a malpractice claim based on his trial counsel's alleged failure to follow up on the government's suggestion of a possible plea deal.  The lower court dismissed the complaint based on precedent cases in the jurisdiction that required the showing of actual innocence.  The Appellate Court, however found that those cases did not apply and held that the actual innocence requirement is not a requirement in all cases.

The court found that the issue was different because in the older cases, the plaintiffs (former criminal defendants) had claimed they were wrongfully convicted as a result of their public defenders' negligence while in Cortez the plaintiff had admitted his guilt.

According to the court, the claimed injury in Cortez is different because as a result of the alleged negligence, Cortez was deprived of an opportunity to accept a more favorable plea offer and, as a result of that deprivation, he received a harsher sentence.  Based on this, the court then concluded that there is no need for proof of innocence because “negligence in the discharge of duties for a client who pleads guilty may result in actual injury to a client even if guilty.”

I don't find the distinction convincing.  What the court is suggesting is that if a person is guilty of the charged crime, and they get convicted, they got what they deserved.  But what they deserved was a negligent free representation and if they can show that they would not have been convicted but for the negligence then they did suffer an actual injury even if they were guilty.

Assume for example that a criminal defendant is guilty of possession of an illegal substance.  He is guilty because he did, in fact, had the drugs in his possession, but for whatever reason decided to plead not guilty and goes to trial.  But also assume that the police obtained the drugs during an illegal search in violation of the defendant's constitutional rights.  Then assume that the defendant's lawyer negligently failed to file a motion to suppress the evidence which would have been granted and which would have resulted in the exoneration of the defendant or the dropping of the charges because there was no other evidence.  Wasn't the defendant convicted but for the negligence of the lawyer?  Didn't the guilty person suffer an actual injury?

Even if guilty, the criminal defendant in this case claim that that the attorney's negligence resulted in actual injury, just as much as the criminal defendant in Cortez could. I think the underlying argument on which both defendants are basing their claims is the same, and that the analysis of the court should be the same.  In fact, I think the court reached the correct result in Cortez, but it is wrong in holding that the result does not apply to other cases.  It should.  There should be no requirement to show actual innocence; period.

Having said all that, it should be noted that in Cortez the court affirmed summary judgment for the lawyer for a different reason.  The plaintiff could not establish that but for the lawyer's substandard performance the government would have offered—and the client would have accepted—a deal better than the one he eventually took.  In other words, the plaintiff's argument that he would have gotten a better result had it not been for the lawyer's negligence was based on speculation, not on an actual fact.  Had the state made a better offer and the attorney had failed to tell the client, then the client would have had a claim; but since no alternative offer was made, the client could not show that the negligent conduct was the cause in fact of the claimed injury.

Tuesday, June 3, 2014

Oregon Supreme Court holds conversations within law firm are privileged in malpractice case against the law firm

Last week, the Oregon Supreme Court became the third state high court to hold that consultations between a law firm's attorneys and the firm's in-house counsel are privileged from discovery in a malpractice action even if they concern the firm's potential liability to a current client. The case is Crimson Trace Corp. v. Davis Wright Tremaine LLP. The issue was most recently addressed in Massachusetts and later in Georgia and has generated an interesting debate. Go here for an article criticizing the Massachusetts and Georgia decisions, and here for a debate on them.