TRT, Inc. CLE Blog

MISCONDUCT – former Sullivan partner sentenced to two years in prison for failure to pay income taxes

John J. O’Brien, formerly a partner at Sullivan & Cromwell, was sentenced on January 11, 2012 to two years and four months in prison for failing to pay millions of dollars in taxes related to his rare books business in the West Village (United States v. O’Brien, 11 cr. 652).  On March 27, 2009 O’Brien was escorted out of his firm’s offices, after attempting to blame millions of dollars in tax delinquencies on his tax preparer.  He was also ordered to pay $2.87 million in restitution by Southern District Magistrate Judge Henry B. Pitman.  O’Brien, an M&A specialist, told the court he was “enormously embarrassed” for failing to report partnership income from 2003 to 2008.    He had hoped to pay his entire tax bill at one time, but such a time never came. 

Starting as an associate at Sullivan & Cromwell in 1992, the New York University School of Law graduate reportedly earned $9.2 million in partnership income between 2003 and 2008.  His failure to pay taxes was discovered when the state of California, where Sullivan & Cromwell has offices, contacted the firm to inform it that O’Brien had not responded to previous notices sent to his home.  Counsel for O’Brien, Russell T. Neufeld, stated that O’Brien had fallen behind initially due to his involvement in a destructive relationship with a business partner, Michael Phelps, who had persuaded him to invest $3 million into Hudson Street Books, a rare books venture.  Neufeld wrote in his sentencing memorandum that O’Brien “is a very unstable, fragile and emotionally needy person” who was ‘particularly unstable’ at the outset of his tax problems; that he had been on medication and was prone to suicide threats and attempts.  “The rare books business was a total failure and John O’Brien continued to pour bad money after good – all in an effort to maintain his relationship with Michael [Phelps].”  An examining psychologist for the defense also concluded that O’Brien’s “persistent fear of losing Michael has caused him to become so overwrought with anxiety and depression that he lost his ability to make a rational choice.”  O’Brien was diagnosed as suffering from a “depressive disorder and a personality disorder with dependent traits.”  O’Brien’s rise and fall was described by Magistrate Judge Pitman as “a Greek tragedy,” with O’Brien having come out of a working class environment, rising to partnership in one of New York City’s top firms, and now heading to prison. 

The Magistrate agreed there was “some evidence [that a] slight mental illness contributed to his crime,” but didn’t credit it as salient.  Pitman observed that O’Brien had indeed accepted responsibility by pleading guilty to four misdemeanors – two counts each of failing to file income tax returns and failing to pay income taxes – but noted that O’Brien had “already gotten a substantial benefit” through his plea agreement with the Southern District U.S. Attorney’s office, which could have charged him with felonies that would have resulted in an automatic loss of his law license.  The Magistrate did inquire, “What happened to the money?” assuming that O’Brien put perhaps $3 million into Hudson Street Books.  This would still have left “more than $5 million in partnership income unaccounted for.”  Records show that O’Brien had only $55,000 in cash and owed his elderly parents $150,000 from a loan they had made to him.  The Magistrate concluded that O’Brien had “spent a tremendous amount of money” while avoiding taxes. 

The U.S. Probation Department recommended a sentence of two years in prison, and Assistant U.S. Attorney Stanley J. Okula Jr., in his memorandum, agreed the sentence should be no less than that.  Okula further stated that O’Brien’s downfall “can’t mask or hide the stark facts” that an attorney ensconced at a prestigious firm avoided paying taxes so he could invest in another business.  “That’s selfishness and greed,” Mr. Okula said. “If the worst thing that could befall Mr. O’Brien is he would have to pay the money back, there would be no general deterrence.”  In a sentencing memorandum, Mr. Neufeld wrote that the evidence before the court showed “a really quite pathetic case of two mentally impaired people in a totally dysfunctional, mutually interdependent and mutually enabling relationship that resulted in John O’Brien becoming so divorced from the reality of his tax obligations that he committed the misdemeanors to which he has pleaded guilty.” 

Neufeld also took issue with an assertion by Mr. Okula that O’Brien had avoided taxes to fund a lavish lifestyle, noting, “This is not just some greedy, money-grubbing guy who tried to steal money and get away with it.”  He asked that the court take into consideration the price his client had already paid.  With perhaps a bit of hyperbole, O’Brien’s counsel said, “If someone could be embarrassed to death, Mr. O’Brien would be deceased at this point.”

But the missing money bothered the judge too much.  He refused to accept as nonsensical the notion that the tax shortfall could be blamed entirely on ‘dependence on his partner’ or ‘dependence on his partner’s’ needs.  Something else was at work, the judge concluded, as O’Brien had “committed crimes that enriched him by millions of dollars – crimes for which detection and apprehension” were virtually certain.  O’Brien is scheduled to commence serving his prison sentence on February 12, 2012.

CONFLICT of INTEREST – lawyer chided for secretly continuing affair with husband of firm’s divorce client

What is the proper sanction for a lawyer who concealed from her boss that she had renewed a romantic relationship with the estranged husband of the firm’s divorce client?  A private reprimand is what a closely divided Vermont Supreme Court decided (In re Strouse, Vt., No. 2010-053, 7/15/11).  The court determined that the lawyer had a duty to reveal that she had resumed the affair because she knew it created a conflict of interest for her firm.  The misconduct also damaged her boss’s relationship with the client and put stress on the client and her children, the court found.

The unnamed client hired a Burlington, Vt., law firm to represent her in a divorce.  When firm attorney Margaret Strouse realized that she was dating the client’s husband, she immediately notified the firm’s senior attorney and recommended that the firm set up a ‘conflict wall.’  Instead, the firm restricted her choices to either (1) ending the affair, or (2) facing termination from the firm.  The following day Strouse told the senior attorney that she had broken off the relationship. This was revealed to the firm’s client, who chose to continue having the firm represent her in her divorce.  Later Strouse was confronted by the senior partner who had received a report that Strouse was still involved with the client’s husband.  Strouse admitted that she had resumed the relationship and was summarily dismissed from the firm.  The court ruled that Strouse had violated Rule 8.4 (c) (dishonesty, fraud, deceit, misrepresentation) but instead of the six-month suspension proposed by the professional responsibility board, it concluded that a public reprimand was sufficient.

Strouse’s decision to continue seeing the husband put the law firm at risk of being in violation of Rule 1.7(a)(2) (current-client conflicts of interest), the court said.  It also turned to Rule 1.10(a) (imputation of conflicts), noting that if one lawyer in a firm is prohibited from representing a client because of a conflict, all members of the firm are forbidden to do so.  Further, the situation raised “serious concerns about loyalty to the client and misuse of confidential information,” the court said. It noted that although some conflicts are consentable, the senior attorney had not sought the client’s consent.  The court rejected Strouse’s claim that she had not engaged in any fraud or deceit, for she had to have been aware that her relationship presented a conflict of interest, and her failure to inform the senior attorney that she had renewed the relationship could be characterized as deceitful.  Turning to the common law concept of ‘negative deceit,’ which states that a failure to disclose material facts may be as fraudulent as an affirmative misrepresentation, the court concluded there was a duty to disclose so the firm could take curative action.

The court also rebuffed the lawyer’s argument that there was no justifiable reliance on her nondisclosure. “The senior attorney relied upon [Strouse’s] promise to terminate the relationship with the husband by continuing to represent the client, oblivious to the conflict of interest and by continuing to employ [Strouse].”  These actions not only damaged the firm by exposing it to an ethics violation, but also damaged the senior attorney’s relationship with the client, causing the client to suffer stress.

Disciplinary counsel had argued that the misconduct warranted disbarment pursuant to Standard 4.6 of the ABA Standards for Imposing Lawyer Sanctions, which calls for disbarment when the lawyer “knowingly deceives a client with intent to benefit the lawyer” and “causes serious injury or potential serious injury to a client.”  However, the majority disagreed, noting that the fraud was aimed at the senior partner, not the client.

Looking to its own decisions and commentary in the ABA Standards, the majority found that disbarment and suspension are normally reserved for serious misconduct. Disbarment is usually invoked where there is “significant criminal activity, misuse of client information or funds, or deceit in the handling of client information,” it said.

As for suspension, the majority said that sanction is typically warranted for egregious misconduct such as serious misrepresentation directly to the client of matters being handled by the attorney or intentional interference with the administration of justice, misrepresentation, and fraud. Although Strouse’s actions were self-serving and caused harm, it said, they were not egregious and were mitigated by her inexperience, remorse, and lack of malice.

“[S]he acted not for greed or glory, nor for malice or lucre,” the majority said, “but apparently for romantic reasons.”

INEFFECTIVE ASSISTANCE OF COUNSEL - POST-CONVICTION RELIEF little question but that client was afforded ineffective assistance of counsel as determined by the Sixth Amendment

Cory R. Maples was found guilty of murder and sentenced to death in Alabama state court. In 2001, Maples sought post-conviction relief in state court under Alabama Rule 32. Maples alleged, among other things, that his underpaid and inexperienced trial attorneys failed to afford him the effective assistance guaranteed by the Sixth Amendment (Maples v. Thomas, Commissioner, Alabama Department of Corrections, US No. 10-63.  Argued October 4, 2011 – January 18, 2012).  Maples’ petition was written by two pro bono attorneys, Jaasai Munanka and Clara Ingen-Housz, both associated with the New York offices of the Sullivan & Cromwell law firm.  As required by Alabama law, the two attorneys engaged an Alabama lawyer, John Butler, to move their admission pro hac vice. Butler made clear, however, that he would undertake no substantive involvement in the case.  In 2002, while Maples’ state post-conviction petition was pending, Munanka and Ingen-Housz left Sullivan & Cromwell. Their new employment disabled them from representing Maples. They did not inform Maples of their departure and consequent inability to serve as his counsel.  In disregard of Alabama law, neither sought the trial court’s leave to withdraw. No other Sullivan & Cromwell attorney entered an appearance, moved to substitute counsel, or otherwise notified the court of a change in Maples’ representation. Thus, Munanka, Ingen-Housz, and Butler remained Maples’ listed, and only, attorneys of record.  The trial court denied Maples’ petition in May 2003. Notices of the order were posted to Munanka and Ingen-Housz at Sullivan & Cromwell’s address. When those postings were returned, unopened, the trial court clerk attempted no further mailing. Butler also received a copy of the order, but did not act on it.

With no attorney of record in fact acting on Maples’ behalf, the 42-day period Maples had to file a notice of appeal ran out.  About a month later, an Alabama Assistant Attorney General sent a letter directly to Maples. The letter informed Maples of the missed deadline and notified him that he had four weeks remaining to file a federal habeas petition. Maples immediately contacted his mother, who called Sullivan & Cromwell.  Three Sullivan & Cromwell attorneys, through Butler, moved the trial court to reissue its order, thereby restarting the 42-day appeal period.  The court denied the motion. The Alabama Court of Criminal Appeals then denied a writ of mandamus that would have granted Maples leave to file an out-of-time appeal, and the State Supreme Court affirmed.

Thereafter, Maples sought federal habeas relief.  Both the District Court and the Eleventh Circuit denied his request, pointing to the procedural default in state court, i.e., Maples’ failure to appeal timely the state trial court’s order denying his Rule 32 petition for post-conviction relief. The Supreme Court held that Maples has shown the requisite “cause” to excuse his procedural default.  The question of prejudice, which neither the District Court nor the Eleventh Circuit reached, remains open for decision on remand.  The 5-2 vote, had Justice Ginsburg delivering the opinion of the Court, joined by Justices Roberts, Kennedy, Breyer, Sotomayor and Kagan.  Justice Alito filed a concurring opinion.  Justice Scalia filed a dissenting opinion, joined by Justice Thomas.

Malpractice - Should smell of alchohol on lawyer's breath be admissible?

The Iowa Supreme Court has ruled that an appellate court correctly reversed a malpractice verdict where there was no evidence that the lawyer gave a subpar performance but the jury was allowed to infer that he was impaired based on testimony that his breath smelled of alcohol during trial (Tim McCandless Inc. v. Yagla, Iowa, No. 09-1738, unpublished, 2/18/11).

The court declared that all the allegations of negligence – not just the two tainted specifications identified by the appellate court – should be remanded for a new trial. The inadmissible alcohol-smell evidence was used to specify all the listed grounds for negligence, the court said, and may have affected each jury instruction.

Clients sued their lawyer for malpractice, claiming that he failed to defend them properly in a civil matter because he had been drinking during the trial. Specifically, they alleged the lawyer: (1) failed to designate or offer expert testimony; (2) did not present available favorable evidence; (3) did not sufficiently prepare witnesses; (4) failed to undertake adequate preparation for trial and (5) allowed improper evidence to be presented.  Several witnesses were allowed to testify that they had smelled alcohol on the attorney’s breath, and the jury ended up awarding the clients more than $85,000.

The court of appeals reversed and remanded, finding that the evidence concerning the smell of alcohol on the attorney’s breath was not relevant, even in a limited way, to prove the plaintiffs’ claims of malpractice. That court said there was no proof that the attorney was impaired while litigating the client’s case, much less that he did not perform competently. Instead, the court said, the plaintiffs left the jury to speculate that the smell of alcohol on the attorney’s breath translated into a breach of applicable standards of care.

On remand, the appellate court said, a new trial was required only on the third and fourth specifications of negligence: the lawyer’s alleged failure to adequately prepare witnesses and his alleged failure to adequately prepare for trial. The Supreme Court agreed with the reversal and remand but ordered retrial on all five allegations, explaining that the tainted breath evidence may have affected each one of the jury instructions because it was used to support each count.

The trial court in a malpractice action should not have allowed evidence that the attorney’s breath smelled of alcohol during the trial of the client’s underlying case, the Iowa Court of Appeals decided Nov. 24 (Tim McCandless Inc. v. Yagla, Iowa Ct. App., No. 09-1738, 11/24/10).

Shortly after the trial ended in a money judgment against the attorney’s clients, the attorney entered a substance abuse treatment facility. Having learned of the alcohol treatment from the attorney’s law partner, the clients sued him for malpractice, claiming that he mishandled the litigation. In the malpractice case, several witnesses testified to the smell of alcohol on the attorney’s breath during the underlying trial.

Reversing and remanding for a new trial in the malpractice action, the court of appeals held that evidence concerning the smell of alcohol on the attorney’s breath was not relevant, even in a limited way, to prove the plaintiffs’ claims of malpractice. The plaintiffs admittedly presented the disputed evidence to show that the attorney was impaired, yet no witness testified to impairment as a result of alcohol, wrote Judge Anuradha Vaitheswaran for the court.

There was no proof, the court emphasized, that the attorney was “under the influence” while litigating the client’s case, much less that he was incapable of incompetently performing his services as a result. Instead, the plaintiffs left the jury to speculate that the smell of alcohol on the attorney’s breath translated into a breach of applicable standards of care, Vaitheswaran said. Accordingly, the evidence of alcohol smell on his breath was irrelevant, and its admission amounted to an abuse of discretion, the court declared.

Even if the evidence was marginally relevant, the court continued, it was unduly prejudicial in the absence of evidence showing impairment, as the testimony generated strong hostility toward the attorney in the malpractice trial.

BAR ADMISSION – GA high court affirms denial of applicant’s application for certification of fitness to practice based on omissions re. criminal history 

The Georgia Supreme Court (In the Matter of Roy W. Yunker, Jr., 289 Ga. 636 S10Z1203, 2011) affirmed the board’s decision not to certify Yunker fit to practice as a result of his apparent failure in his application to disclose his criminal history, military discharge after an alcohol related incident, and his law school’s withdrawal of its recommendation of trust to the Board following Yunker’s post-graduation amendment of inaccuracies on his law school application.  The court agreed that Yunker’s misconduct constituted “a pattern of conduct that demonstrates a lack of judgment, integrity, character, professionalism and the requisite moral fitness required of a prospective member of the State Bar of Georgia.”

Yunker applied to John Marshall Law School in July 2005. The law school application asked whether the applicant had ever been charged or convicted of a crime other than a minor traffic offense, and Yunker answered “no” even though he had been convicted of misdemeanor offenses in three separate incidents. In 1988, he pled guilty to driving under the influence of alcohol (“DUI”) in North Carolina, in 1989, he pled nolo contendere to disorderly conduct and damage to property in Pennsylvania, and in 2000 he pled nolo contendere to family violence battery in DeKalb County, stemming from an incident in which he choked his then wife. According to Yunker, these incidents were influenced by his consumption of alcohol. Yunker was admitted to the law school, and started taking classes in August 2005.

Beginning in May 2007, Yunker served as an unpaid intern with the Atlanta Metro Conflict Defender’s Office. In June 2007, after a disagreement with a senior staff attorney in that office, whom he was assigned to assist, he refused to sit next to the attorney in court and left the courtroom without asking permission. Later that day, and the day after, Yunker sent the attorney e-mails in which he used veiled and actual profanity.  Yunker was directed to disconnect his laptop computer from the office network.  An argument ensued between Yunker and the attorney, and Yunker’s internship was terminated.

In his amended law school application he addressed his prior inaccurate responses by stating,  “I can only believe that at the time, when I read the word ‘crime[,]’ I wasn’t thinking of the sorts of arrests I experienced, but was thinking of crimes like robbery, murder, or other actions that I know now as felonies.”

When Yunker was questioned about the battery against his now former wife, and was asked how he could be trusted not to similarly exploit a client’s vulnerability, his response was, “Probably because I am not going to marry them.”

The hearing officer concluded that Yunker’s failure to adequately and fully disclose his previous charges or convictions evidenced a present lack of candor and honesty; that his various explanations to account for his inaccurate responses strained credibility; and that the events and circumstances surrounding his abrupt separation from his internship with the Atlanta Metro Conflict Defender revealed Yunker’s lack of maturity, poor judgment, and his failure to take appropriate responsibility for his actions.

MISCONDUCT – SEC free to enact state disciplinary rules based on its findings that a lawyer violated state discipline rules in his securities practice

In Altman v. Securities and Exchange Commission, D.C. Cir., No. 11-1067, 12/16/11, the U.S. Court of Appeals for the District of Columbia Circuit ruled that the SEC may apply state disciplinary rules – suspending or disbarring a lawyer from practice before the commission when it finds a lawyer has violated said rules in the lawyer’s securities practice.

“[T]he Commission did not lack authority to act because of previous pronouncements that it would generally not do so without prior judicial or administrative findings of misconduct.”

The SEC sought to disbar a lawyer from practicing before the commission based on its findings that he tried to make a deal with another lawyer that included an offer for his client to present untruthful testimony in an SEC matter.  The SEC charged that New York attorney Steven Altman engaged in unprofessional conduct while representing a commission witness. Altman, the court said, had been recorded purportedly negotiating a deal that would have benefited his client in exchange for not testifying before the commission or claiming not to remember certain things.

The SEC ultimately disbarred Altman from future practice before the commission, citing his “egregious” and “recurrent” misconduct.  The commission relied on a finding by an administrative law judge that Altman violated three provisions of the former New York Code of Professional Responsibility: DR 1-102(A)(4) prohibiting dishonesty; DR 1-102(A)(5) prohibiting conduct prejudicial to the administration of justice, and DR 1-102(A)(7) prohibiting conduct adversely reflecting on a lawyer's fitness as a lawyer.

After exhausting remedies with the SEC, Altman petitioned the appellate court for review.  The court upheld the commission's disciplinary authority and its decision to exercise that power against Altman. “The Commission has previously relied on external codes of professional conduct, including the ABA Canons of Professional Ethics, as a basis for disciplining attorneys under its rules,” observed Justice Rogers.

The court dismissed Altman's contention that the SEC's “exercise of authority absent prior disciplinary proceedings” implicated separation of powers concerns.

“The sanction imposed on Altman is limited to appearances before the Commission and has no effect either on his ability to practice law in New York State and to appear before any court, or on New York State's authority to discipline him,” wrote Justice Rogers for the court.

The SEC has long possessed the statutory power to discipline those who appear before it for engaging in improper professional conduct, under Section 4C of the Securities and Exchange Act of 1934, 15 U.S.C. §78d-3(a)(2). That authority is exercised through the SEC's Rule 102(e), the court noted.

The court also observed that the SEC had made clear in an administrative ruling Carter and Johnson, 47 S.E.C. 471 (Feb. 28, 1981) that it retains the authority to discipline securities lawyers for violating lawyer conduct rules.

LEGAL EMPLOYMENT OPPORTUNITIES – elite law school graduates are increasingly finding work outside big law firms

More graduates of elite law schools are finding work outside law firms reports the Chicago Tribune (December 16, 2011).  Amid a growing debate about the value of going to law school in times of economic uncertainty, the University of Chicago reports that its graduates are doing very well. 

The law school just published on its website more comprehensive employment data about its recent graduates than it has in the past. The move toward more transparency was motivated by the controversy that some schools continue to market the prospects of high-paying jobs when the reality of the job market is much different.

The University of Chicago also is proud of its statistics and is not ashamed to share them. Of its 611 law graduates between 2008 and 2010, only 10 were unemployed nine months after finishing school. The median salary for all three years was $160,000.

Interestingly, fewer of its 2010 graduates ended up at law firms than those in prior classes. Of the 191 employed graduates of a class of 195, 71.2 percent found work at law firms. In the previous two classes, which were about the same size as 2010's, about 80 percent were employed at firms.

Northwestern University's law school experienced a similar decline. Sixty-two percent of the 268 employed 2010 grads went to work at law firms. In the previous four years, at least 73 percent of its employed grads nine months out of school were earning a living at firms.

The employment data show that even the Chicago area's two most prestigious law schools were not immune to the economic downturn. Law firms, especially larger ones that have more than 500 attorneys, reduced entry-level hiring in response to the financial crisis in 2008. The big question is whether law firm hiring in 2010 was a one-year blip or the start of a long-term trend.

Brad Keck, a U.S.hiring partner for Mayer Brown inChicago, is not optimistic hiring will bounce back any time soon to pre-crisis levels at the international firm.  “There's going to be some modest increase in hiring,” he said, “but not as high as it's been historically, because turnover is low and there's general softness in the demand for legal services.”

The dim outlook has widespread consequences for law schools. Applications are down even at the top schools. Application volume at the University of Chicago was off 14 percent last year, said Michael Schill, dean of the law school.

At the top schools, competition has increased for the coveted jobs at elite law firms that pay the $160,000 starting salaries. Schools have had to adjust their placement and financial aid strategies. Encouraging students to consider jobs in government or public interest is a hard sell because those jobs don't pay as well as private practice. The median salary of 2010 U. of C. law school graduates who took a government job was $56,734, slightly above the law school's annual tuition of $47,502.

Earlier this year, the University of Chicago said it would offer more financial assistance for law students considering nonprofit work or judicial clerkships. Graduates who stay in public-interest jobs for 10 years will have their education loans forgiven.

“There are still plenty of opportunities for students at the top-tier schools,” said William Henderson, director of the Center on the Global Legal Profession at Indiana University. “But they are displacing graduates from other schools.”

Most law schools will not report their employment data for the class of 2011 until February. The push toward more transparency is easier on schools such as Northwestern and University of Chicago. But “it's going to be pretty embarrassing for a lot of schools,”Henderson said.

LAWYER-CLIENT RELATIONSHIP – attorneys do not necessarily engage in unethical conduct by writing filings for pro se litigants without court disclosure

The Second Circuit has ruled that attorneys may ghostwrite filings for pro se litigants to submit to the court without violating any current standards of conduct.  An attorney did not act dishonestly and therefore is not subject to discipline for writing petitions for a pro se litigant without disclosing her involvement in the case to the court (In re Liu, 2d Cir., No. 09-90006-am, 11/22/11).

Noting conflicting authority on the issue, the court found persuasive a 2007 opinion by the ABA's Standing Committee on Ethics and Professional Responsibility, concluding that ghostwriting briefs and pleadings don’t inherently violate lawyer conduct rules.

The Committee on Attorney Admissions and Grievance for the Second Circuit  recommended that attorney Fengling Liu be publicly reprimanded for instances including an assertion that Liu violated her duty of candor by not informing the court that she helped draft petitions that were filed by pro se litigants in the Second Circuit.

While issuing a public reprimand for other misconduct, the court decided that Liu did not commit sanctionable misconduct when she ghostwrote the petitions.  The court announced three categories of ghostwriting:  (1) where an attorney drafts a pleading and her involvement is not disclosed; (2) where the pro se litigant tells the court about the attorney's involvement, but not her identity, and (3) when the attorney's identity is disclosed, but she does not enter an appearance or sign the pleading.

The court noted that a number of federal courts “have found that attorneys who had ghostwritten briefs or other pleadings for ostensibly pro se litigants had engaged in misconduct.”  However, “a number of bar association ethics committees have been more accepting of ghostwriting,” the Second Circuit said.

ABA Formal Ethics Opinion 07-446 (2007) notes “A lawyer may provide legal assistance to litigants appearing before tribunals ‘pro se’ and help them prepare written submissions without disclosing or ensuring the disclosure of the nature or extent of such assistance.”  Providing such service, the committee said, is a form of limited representation under Model Rule of Professional Conduct 1.2(c), which states: “A lawyer may limit the scope of the representation if the limitation is reasonable under the circumstances and the client gives informed consent.”

Opinion 07-446 continues “Whether it is dishonest for the lawyer to provide undisclosed assistance to a pro se litigant turns on whether the court would be misled by failure to disclose such assistance.” There is no dishonesty so long as the client does not make an affirmative representation, attributable to the attorney, that the pleadings were prepared without an attorney's assistance.

 An earlier committee had concluded that Liu's ghostwriting violated her duty of candor to the court and thus ran afoul of DR 1-102(a)(4) of the former New York Code of Professional Responsibility, barring lawyers from engaging in conduct “involving dishonesty, fraud, deceit, or misrepresentation.”

The court said, however, that to violate DR 1-102(a)(4), Liu, at the very least, would have to have known, or should have known, “of either (a) an existing obligation to disclose her drafting of pleadings, or (b) even in the absence of such a general obligation, the possibility that nondisclosure in a particular case would mislead the court in material fashion.”

The court said that “In light of this Court's lack of any rule or precedent governing attorney ghostwriting, and the various authorities that permit that practice, we conclude that Liu could not have been aware of any general obligation to disclose participation to this court.” It concluded that “Liu's ghostwriting did not constitute misconduct and therefore does not warrant the imposition of discipline.”

CONFLICTS OF INTEREST – state attorney’s role in criminal probe bars his later involvement in a related civil suit

An attorney must discontinue his defense of a health care facility in a civil lawsuit  closely related to a criminal probe where the lawyer was instrumental in his previous job as a state attorney (United States v. Villaspring Health Care Center Inc., E.D. Ky., Civ. No. 3:11-43-DCR, 11/7/11).  The court found that the lawyer, Christopher A. Melton, an assistant attorney general in the Medicaid Fraud Control Unit inKentucky, had participated personally and substantially in the criminal investigation of abuse and neglect at Villaspring Health Care Center.  Though no criminal charges were filed, the matter was forwarded to theU.S. attorney’s office.

Finding that the current civil action is the same ‘matter’ as the criminal probe in analyzing Rule 1.11 on successive government and private employment, the conflict was imputed to Melton and his firm but co-counsel was not disqualified.  Nor did an opinion from an ethics hotline insulate Melton from being disqualified. 

Judge Danny C. Reeves observed that “there is no standing requirement in Rule 1.11,” which the court said obviated any extended discussion of whether the issue of the attorney’s conflict was properly before the court, for under Rule 1.11 any party to a proceeding may move for an attorney’s removal even if the party is not a former client.

Upon leaving the attorney general’s office, Melton joined Weber & Rose, when a lawyer representing Villaspring asked him to assist in defending Villaspring in a False Claims Act lawsuit brought by the federal government. Thereupon Melton contacted the Kentucky Attorney General’s Office to assure that the investigation into Villaspring was inactive.  He also consulted with the ethics officer at his firm, and received a hotline opinion from the Kentucky Bar Association stating that the representation did not constitute a conflict.

Petitioning to disqualify Melton, his firm, and all of his co-counsel in the False Claims Act action, the government applied the Kentucky Rules of Professional Conduct as directed by the federal court’s local rules.  Judge Reeves ruled that Melton and his firm must step down as counsel

Melton’s conflict did not arise from federal employment, but Judge Reeves observed “there is no standing requirement in Rule 1.11, so theUnited Statesdoes not need to be a former client of Melton’s to seek disqualification.”  An issue of standing would be needed only if the court were relying on Rule 1.9 to disqualify Melton.

Judge Reeves noted that Rule 1.11(a)(2), which prohibits a former government attorney from representing a client in connection with a matter in which the lawyer participated “personally and substantially” as a public officer or employee, has as a caveat, “unless the agency gives informed consent, confirmed in writing.”  The state attorney general’s office neither consented to Melton’s representation of Villaspring nor did it render its informed consent in writing.

The court concluded that Melton must be disqualified due to this violation “and the appearance of impropriety that it creates.”   

PROSECUTOR CONDUCT . . . UNBECOMING? – book by Casey Anthony Prosecutor described as ‘Relentless, Scathing and Blunt’

Casey Anthony prosecutor Jeff Ashton says in a new book released today that the acquitted defendant is a liar who offered differing versions of what happened to her daughter, according to an article by Debra Cassens Weiss on the ABA JOURNAL Law News Now, November 15, 2011.

Defense lawyers bought the fourth version—that Casey Anthony’s father killed Caylee Anthony, Ashton writes in Imperfect Justice: Prosecuting Casey Anthony. The Orlando Sentinel reports on Ashton’s assertions.

According to the book, Anthony told two mental health experts that her daughter drowned in the family pool, and her father killed her. The defense decided not to offer testimony by those experts after the prosecution sought to have its own mental health expert interview Casey Anthony, the Sentinel says in its story on the book.

“I have seen my share of liars, but never one quite like this,” Ashton writes, referring to Casey Anthony. “In many ways, I think the defense came to mirror the client they represented.” Ashton says he genuinely disliked defense lawyer Jose Baez, calling him a “consummate salesman” who displays “unearned arrogance.” Ashton told the Sentinel the book could lead to more ethics inquiries.

The Sentinel calls the book “undeniably Ashton-esque—relentless, scathing and blunt in its criticism of Casey Anthony, her defense team, the Anthony family and the jury that found the young woman not-guilty in the 2008 death of her daughter.”

Were the book to lead to more ethics inquiries as Prosecutor Ashton suggests, could a case be made that any enquiries would likely focus on defense lawyer Jose Baez, prosecutor Jeff Ashton, or both?