Justia Legal Ethics Opinion Summaries

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After plaintiff successfully challenged in bankruptcy court a tax penalty assessed against him by the IRS that exceeded $40 million, plaintiff filed suit against the IRS and three IRS agents, in their individual capacities, pleading a claim for damages against the individual defendants under Bivens v. Six Unknown Fed. Narcotics Agents, 403 U.S. 388 (1971), for allegedly violating his Fifth Amendment right to procedural due process. Plaintiff also sought attorney's fees he incurred litigating the penalty issue in his Chapter 11 bankruptcy case under 26 U.S.C. 7430 and the Equal Access to Justice Act. The Fifth Circuit affirmed the district court's grant of defendants' Federal Rule of Civil Procedure 12(b)(6) motion and dismissal of the action with prejudice. The court held that the district court properly concluded that this case was a new Bivens context and that special factors existed under Ziglar v. Abbasi, 137 S. Ct. 1843 (2017). The court also held that plaintiff was not entitled to recover attorney's fees because his request was untimely under 28 U.S.C. 2412(d)(1)(B) and he was not a "prevailing party" under 26 U.S.C. 7430(c)(4)(A)(ii). View "Canada, Jr. v. United States (Internal Revenue Service)" on Justia Law

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In a 2007 RICO action, Needle (a Pennsylvania sole practitioner) and Illinois attorneys represented the plaintiffs under a contingent fee agreement. The Illinois attorneys withdrew; Needle recruited Illinois attorney Royce as local counsel. They eventually settled the case for $4.2 million. The settlement agreement did not address attorney’s fees, costs, or expenses. Needle wanted $2.5 million, leaving the plaintiffs with $1.7 million. The attorneys also disagreed over the division of the fee between themselves. Royce filed an interpleader action. Needle “routinely and unapologetically tested the district court’s patience, disregarded court orders, and caused unnecessary delays.” The court repeatedly sanctioned Needle, ultimately following the written fee agreement. The Seventh Circuit affirmed an award of attorneys’ fees of one-third of the settlement, with Needle 60 receiving percent and Royce 40 percent of the aggregate. During the dispute, Needle was without counsel and was on the verge of a default judgment, when three partners from the O’Connor law firm stepped in to represent Needle P.C. Less than three months after appearing as counsel, O’Connor “understandably” withdrew due to irreconcilable differences and a total breakdown of the attorney-client relationship. O’Connor sought compensation under a quantum meruit theory and perfected an attorney’s lien. The district court granted O’Connor’s petition to adjudicate and enforce the lien. The Seventh Circuit affirmed. O’Connor is entitled to recover in quantum meruit and the district court properly concluded that the petitioned fees were reasonable. View "Michael Needle, P.C. v. Cozen O'Connor" on Justia Law

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In the underlying 2007 civil RICO action, Needle (a Pennsylvania sole practitioner) and two Illinois attorneys represented the plaintiffs. The attorneys executed a contingent fee agreement with their clients. The Illinois attorneys later withdrew from the representation, so Needle recruited Illinois attorney Royce as local counsel. Needle and Royce agreed to split half of any fee equally and the other half proportional to the time each spent on the matter. Needle and Royce litigated the suit for several years before successfully settling the case for $4.2 million. The settlement agreement did not address attorney’s fees, costs, or expenses. All payments were made to Royce as escrow agent. Needle wanted $2.5 million, leaving the plaintiffs with $1.7 million. Needle and Royce also disagreed over the division of the attorney’s fee between themselves. Royce filed an interpleader action. The Seventh Circuit described what followed as “a long, tortured history” based on an “objectively frivolous" position; Needle “routinely and unapologetically tested the court’s patience, disregarded court orders, and caused unnecessary delays.” The court repeatedly sanctioned Needle for “obstructionist and vexatious” tactics. The district court followed the written fee agreement and awarded attorneys’ fees of one-third of the settlement, then awarded Needle 60 percent and Royce 40 percent of the aggregate. The Seventh Circuit affirmed: The district court’s rulings were correct, the sanctions were appropriate, and Needle’s other arguments are baseless. View "Royce v. Needle" on Justia Law

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Fourstar, a federal prisoner, filed a Tucker Act Complaint with a Motion for Leave to Proceed In Forma Pauperis. He claimed that the government is mismanaging certain Indian properties and resources. The Claims Court denied his motion to proceed in forma pauperis, citing 28 U.S.C. 1915(g), which provides: In no event shall a prisoner bring a civil action or appeal ... under this section if the prisoner has, on 3 or more prior occasions, while incarcerated or detained in any facility, brought an action or appeal in a court of the United States that was dismissed on the grounds that it is frivolous, malicious, or fails to state a claim upon which relief may be granted, unless the prisoner is under imminent danger of serious physical injury,” Prison Litigation Reform Act, 110 Stat. 1321. Fourstar did not pay the filing fee. The court dismissed his complaint. Fourstar was released from prison and later filed a Notice of Appeal. He later filed a statement that he was subsequently arrested and detained and unsuccessfully moved to proceed in forma pauperis on appeal. Because Fourstar was not a prisoner at the time of filing his appeal, section 1915 is not applicable. The Federal Circuit affirmed that the three-strikes rule was met by Fourstar’s litigation history and that Fourstar was not subject to the “imminent danger” exception. View "Fourstar v. United States" on Justia Law

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Glen Ward appealed an order and final judgment of the district court granting the State’s motion for summary dismissal and dismissing his petition for post-conviction relief. In 2014, Ward was convicted of sexual abuse of a minor under 16 years of age after he pleaded guilty to all elements of the crime except for the sexual intent element, to which he entered an Alford plea. He was sentenced to 18 years imprisonment with a 7-year fixed term. Ward asked for, and was granted, appointment of counsel to represent him in the post-conviction relief proceedings. After granting the motion, the district court appointed a conflict public defender to represent Ward in the action. Although he had secured new counsel, Ward subsequently filed numerous pro se documents. Ward argued the district court abused its discretion by denying his motion to proceed pro se as moot. Ward also argued the district court erred in denying his motion to proceed pro se because a post-conviction petitioner has a right to proceed pro se. After review, the Idaho Supreme Court vacated in part and affirmed. The Court held that the district court should have refused to entertain Ward’s independent filings in the first place; to the extent that the district court entertained the filings made by Ward as opposed to by his attorney, it was error to do so. However, having come to the conclusion that the district court erred, not by ruling incorrectly on Ward’s purported motion, but by ruling on it at all, the Supreme Court did not need to reverse the district court’s separate order and final judgment granting summary dismissal. "Because we hold that there was no motion properly before the district court to be ruled upon in the first place, the district court’s denial of the purported motion has no impact on the propriety of its final decision and judgment dismissing Ward’s post-conviction petition on the merits." View "Ward v. Idaho" on Justia Law

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For tax reasons ISN Software Corporation wanted to convert from a C corporation to an S corporation. But four of its eight stockholders, representing about 25 percent of the outstanding stock, could not qualify as S Corporation stockholders. ISN sought advice from Richards, Layton & Finger, P.A. (RLF) about its options. RLF advised ISN that before a conversion ISN could use a merger to cash out some or all of the four stockholders. The cashed-out stockholders could then accept ISN’s cash-out offer or exercise appraisal rights under Delaware law. ISN did not proceed with the conversion, but decided to use a merger to cash out three of the four non-qualifying stockholders. After ISN completed the merger, RLF notified ISN that its advice might not have been correct. All four stockholders, including the remaining stockholder whom ISN wanted to exclude, were entitled to appraisal rights. ISN decided not to try and unwind the merger, instead proceeding with the merger and notified all four stockholders they were entitled to appraisal. ISN and RLF agreed that RLF would continue to represent ISN in any appraisal action. Three of the four stockholders, including the stockholder ISN wanted to exclude, eventually demanded appraisal. Years later, when things did not turn out as ISN had hoped (the appraised value of ISN stock ended up substantially higher than ISN had reserved for), ISN filed a legal malpractice claim against RLF. The Superior Court dismissed ISN’s August 1, 2018 complaint on statute of limitations grounds. The court found that the statute of limitations expired three years after RLF informed ISN of the erroneous advice, or, at the latest, three years after the stockholder ISN sought to exclude demanded appraisal. On appeal, ISN argued its legal malpractice claim did not accrue until after the appraisal action valued ISN’s stock because only then could ISN claim damages. Although it applied a different analysis, the Delaware Supreme Court agreed with the Superior Court that the statute of limitations began to run in January 2013. By the time ISN filed its malpractice claim on August 1, 2018, the statute of limitations had expired. Thus, the Superior Court’s judgment was affirmed. View "ISN Software Corporation v. Richards, Layton & Finger, P.A." on Justia Law

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The issue presented for the Mississippi Supreme Court’s review involved the first-to-file rule. Most of the claims were properly transferred, but all parties to this appeal agreed it was error to transfer the claims against two of the defendants, Michele Biegel and Bettie Johnson. The underlying controversy was a fee dispute between attorneys Seth Little, Barry Wade Gilmer, and Chuck McRae. McRae sued Gilmer in the Hinds County Chancery Court, claiming unjust enrichment and seeking an accounting. Gilmer later filed this suit in the Madison County Circuit Court against McRae’s attorneys in the fee dispute, Michele Biegel and Bettie Ruth Johnson. Biegel and Johnson filed a special entry of appearance and a motion to dismiss the complaint against them. McRae requested that the claims against him be transferred to Hinds Chancery Court, in which McRae previously filed suit against Gilmer. The Madison County Circuit Court ordered the entire suit, including claims against Biegel and Johnson, transferred, and denied Biegel and Johnson’s motion to reconsider. The Supreme Court concurred the transfer of the entire case was made in error, and therefore reversed transfer of claims from the Madison County Circuit Court to the Hinds County court. View "Biegel v. Gilmer" on Justia Law

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Natalie Shubert filed a negligence claim against her former public defender, Michael Lojek, former Ada County chief public defender Alan Trimming, and Ada County (collectively, “Ada County Defendants”). In 2008, Shubert was charged with two felonies and pleaded guilty to both charges. Her sentences were suspended in each case, and she was placed on probation. After a probation violation in 2011, the Ada County district court entered an order extending Shubert’s probation beyond the time period allowed by law, and the mistake was not caught. After Shubert’s probation should have ended in both cases, she was charged and incarcerated for a subsequent probation violation in 2014. Thereafter, in 2016, Shubert was charged with a new probation violation. Shubert was assigned a new public defender, who discovered the error that unlawfully kept Shubert on probation. Shubert’s new public defender filed a motion to correct the illegal sentence, raising the error that had improperly extended her probation. The district court granted Shubert’s motion to correct the illegal sentence and released Shubert from custody. Shubert then sued her original public defender, the Ada County Public Defender’s Officer, and other unknown Ada County employees alleging false imprisonment, intentional infliction of emotional distress, negligence per se, negligence, and state and federal constitutional violations. The district court dismissed all of Shubert’s claims except for negligence. In denying the Ada County Defendants’ motion for summary judgment on Shubert’s negligence claim, the district court held that public defenders were not entitled to common law quasi-judicial immunity from civil malpractice liability, and two provisions of the Idaho Tort Claims Act (ITCA) did not exempt public defenders from civil malpractice liability. The Ada County Defendants petitioned the Idaho Supreme Court, but the Supreme Court affirmed, finding the district court did not err in its finding that the public defenders and the County were not entitled to immunity. The case was remanded for further proceedings. View "Shubert v. Ada County" on Justia Law

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Following a child custody hearing in January 2017, the trial court entered an order giving Mother sole custody. In June 2017, Father filed an unsuccessful request to set aside that order. Weeks later, he filed a second unsuccessful request to modify the order. The trial court denied Mother’s request for section 271 sanctions. Months later, she again sought sanctions relating to the June 2017 motion. Father filed an objection but did not challenge the motion on the basis of timeliness. The court ordered Father to pay $10,000 in section 271 sanctions. Father sought reconsideration, arguing for the first time that the sanction request was untimely under California Rules of Court, rule 3.1702(b). The trial court denied the motion and awarded Mother $3,000 in attorney fee sanctions for having to defend the ex parte motion for reconsideration. The court of appeal affirmed. Rule 3.1702(b) states: “A notice of motion to claim attorney’s fees for services up to and including the rendition of judgment in the trial court—including attorney’s fees on an appeal before the rendition of judgment in the trial court—must be served and filed within the time for filing a notice of appeal.” The timing of a notice of appeal is based on the entry of judgment. The sanctions at issue were awarded for attorney fees incurred after entry of the January 2017 judgment; rule 3.1702 does not apply. View "George v. Shams-Shirazi" on Justia Law

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In June 2016, shortly after the child’s birth, the Boulder County Department of Housing and Human Services initiated this case based on evidence that the child’s mother was using drugs and that both father and the child’s mother were missing the child’s cues, were homeless, and had previously been involved in child welfare cases. The child was placed with maternal relatives. As pertinent here, the juvenile court adjudicated the child dependent and neglected as to father based on father’s admission that he needed support and services and that the child’s environment was injurious to her welfare. At the first hearing in the juvenile court, father appeared in custody following a recent arrest. The court appointed counsel for him and approved an initial treatment plan. Two months later, the court conducted another hearing, and father again appeared in custody, this time based on new drug possession charges. The Department filed a motion to terminate father’s parental rights. In this petition, the Department alleged that (1) father did not comply with his treatment plan, and the treatment plan failed; (2) no additional period of time would allow for the successful completion of the treatment plan; (3) father was an unfit parent; (4) father’s conduct or condition was unlikely to change within a reasonable period of time; and (5) there were no less drastic alternatives to termination, which would be in the child’s best interests. The matter then proceeded to a termination hearing; father was incarcerated. When father did not appear for the hearing, father’s counsel told the court that father was “on a writ at Arapahoe County and he refused the writ so he did not want to appear today.” Father’s counsel did not seek a continuance to ensure father’s presence, and the court found that father had voluntarily absented himself from the court. Mother was denied her request for a continuance. The issue this case presented for the Colorado Supreme Court’s review was similar to that decided in its companion, Colorado in Interest of A.R., 2020 CO 10, __ P.3d __. Here, as in A.R., the Supreme Court was asked to decide (1) the correct standard for determining whether a parent in a dependency and neglect proceeding was prejudiced by counsel’s ineffective performance and (2) whether an appellate court may vacate a juvenile court’s decision in a dependency and neglect proceeding on the ground of ineffective assistance of counsel without remanding the case for further evidentiary development. Applying those principles here, the Court concluded the juvenile court correctly applied Strickland’s prejudice prong to father’s ineffective assistance of counsel claims and that the court did not abuse its discretion in rejecting those claims. View "M.A.W. v. The People in Interest of A.L.W." on Justia Law