Justia Legal Ethics Opinion Summaries

The U.S. Trustee alleged that Husain’s bankruptcy filings regularly failed to include debtors’ genuine signatures. Bankruptcy Judge Cox of the Northern District of Illinois made extensive findings, disbarred Husain, and ordered him to refund fees to 18 clients. When he did not do so, Judge Cox held him in contempt of court. The court’s Executive Committee affirmed the disbarment and dismissed the appeal from the order holding Husain in contempt but did not transfer the contempt appeal to a single judge, although 28 U.S.C. 158(a) entitles Husain to review by at least one district judge. The Seventh Circuit affirmed the disbarment and remanded the contempt appeal for decision by a single judge. The court noted extensive evidence that Husain submitted false signatures, documents that could not have been honest, and petitions on behalf of ineligible debtors; he omitted assets and lied on the stand during the hearing. The court noted that Husain’s appeal was handled under seal and stated that: There is no secrecy to maintain, no reason to depart from the strong norm that judicial proceedings are open to public view. View "In re: Husain" on Justia Law

In 2012, Koehn filed a pro se complaint against his former employers. A magistrate held a settlement conference and appointed counsel for Koehn. The parties did not settle. Koehn obtained new counsel. The court held a telephonic status hearing and inquired about settlement negotiations. Defense counsel explained that he was new to the case and that, based on conversations with Defendants’ prior counsel, he believed that Defendants’ insurer had proposed a settlement of about $150,000. Koehn’s counsel stated that she had never heard that figure and that, given that information, a settlement conference might be productive. Defense counsel agreed and the court scheduled a conference. At that conference, Defendants offered less than $75,000, which Koehn had rejected in 2015. Koehn rejected the offer again. When the conference ended, the court stated: “At the conclusion of the jury trial, counsel for the Plaintiff may submit a request for attorney’s fees and costs associated with the unnecessary settlement conference held based upon defense counsel’s representations.” Koehn lost at trial but requested $3,744 in fees and $552.85 in costs associated with the 2016 conference. The district court granted Koehn’s motion; FRCP 16 allows the imposition of sanctions where a party’s failure to timely and candidly communicate a change in settlement posture results in an unnecessary settlement conference. The Seventh Circuit affirmed. Defendants did not participate in the settlement conference in good faith. View "Koehn v. Tobias" on Justia Law

Attorney King approached Terry, a supposed drug dealer, at a strip club. King offered to help Terry launder drug money. Terry, actually a confidential informant, told the police, who arranged several meetings that Terry secretly recorded. Terry told King that he had drugs shipped in from Mexico but that he didn’t sell the product at the “street level.” None Terry's statements were true. King proposed to imitate what he had seen on Breaking Bad: One option was to use a “cash heavy” entertainment business. He also suggested funneling money through his IOLTA trust account used by attorneys to hold client money: King would provide fictitious legal services, deduct payments from the account, and return the remaining money to Terry. They agreed to the IOLTA account approach. Terry gave King $20,000. King promised to deposit it in his IOLTA account. King gave Terry a check for $2,000 in February and another for the same amount in March. King was convicted of two counts of money laundering and one count of attempted money laundering and was sentenced to 44 months in prison. The Sixth Circuit affirmed, rejecting arguments that the introduction of recorded conversations between him and the informant violated his Sixth Amendment right to confront witnesses and that the court improperly allowed the prosecution to ask him about his prior arrest for cocaine possession. View "United States v. King" on Justia Law

Former clients sued their attorneys for legal malpractice based, in part, on the attorneys' withdrawal from a prior ease. But the attorneys obtained that withdrawal by court order. In the original case, the former clients appealed the court's order approving withdrawal, and that appeal was rejected. The attorneys thus argued collateral estoppel applied to bar a malpractice action based on their withdrawal. The Washington Supreme Court agreed: withdrawal by court order in an earlier proceeding was dispositive in a later malpractice suit against the attorney. Although other malpractice complaints unrelated to the withdrawal would not be precluded, a client cannot relitigate whether the attorney's withdrawal was proper. “If we are to have rules permitting attorney withdrawal, we must allow attorneys to have confidence in those rules.” View "Schibel v. Eymann" on Justia Law

The Judicial Tenure Commission (JTC) filed a formal complaint against Sixth Circuit Judge Lisa Gorcyca, alleging two counts of judicial misconduct arising from a hearing at which she found three children in contempt of court. The contempt hearing arose in the context of a protracted and acrimonious divorce and custody case. The two younger children, 10-year-old RT and 9-year-old NT, were ordered to participate in parenting time in respondent’s jury room with their father. LT was not scheduled for parenting time with his father on that day, but he came to the court with his siblings. After the children refused to communicate with their father, respondent held a show cause hearing to determine why all three children should not be held in contempt. Among other things, respondent told LT that he was defiant, contemptuous, and “mentally messed up.” She held him in direct contempt of court and ordered LT to be confined at Oakland County Children’s Village. Respondent then addressed RT and NT, who were initially apologetic and indicated that they would try to comply with the court’s order but later stated that they would prefer to go with LT to Children’s Village. All three children were handcuffed and removed from the courtroom. The JTC special master found respondent committed misconduct by: (1) finding LT in contempt of a nonexistent parenting-time order; (2) giving the children’s father the keys to the jailhouse thereby depriving the children of the opportunity to purge their contempt; (3) making a gesture indicating that LT was crazy and making disparaging remarks about the children; and (4) misrepresenting to the JTC that the gesture was intended to communicate LT’s moving forward with therapy. The JTC adopted the master’s findings with one exception: the JTC disagreed with the master that respondent misrepresented the meaning of the gesture and concluded that her answer was merely misleading. The JTC recommended that the appropriate discipline for respondent’s misconduct was a 30-day suspension without pay and costs. After review of the record the Michigan Supreme Court agreed in part with the Commission’s conclusion that respondent committed judicial misconduct, but was not persuaded that the recommended sanction was appropriate. Instead, the Court held public censure was proportionate to the judicial misconduct established by the record. The Court rejected the Commission’s recommendation to impose costs, fees, and expenses against respondent under MCR 9.205(B). View "In re Hon. Lisa Gorcyca" on Justia Law

Defendants Beachcomber Management Crystal Cove, LLC (Management) and Douglas Cavanaugh (collectively, Defendants) challenged a trial court’s order disqualifying the law firm of Kohut & Kohut LLP (Kohut) from continuing to represent Defendants in the underlying matter. In March 2016, Plaintiffs filed this lawsuit on behalf of Beachcomber at Crystal Cove, LLC as a shareholder derivative action against Defendants. The complaint named the Company as a nominal defendant and alleged claims for fraud, breach of fiduciary duty, abuse of control, gross negligence and mismanagement, breach of duty of honest services, unjust enrichment, declaratory relief, and accounting. Plaintiffs alleged Defendants abused their position as the Company’s managers by diverting Company funds to other Cavanaugh entities, paying themselves unauthorized management fees, misallocating expenses the Company shares with other entities, and refusing to provide Plaintiffs complete access to the Company’s books and records. Defendants hired Kohut to represent them in this lawsuit, and the Company hired independent counsel, the law firm of Corbin, Steelman & Specter, to represent it in this lawsuit. In May 2016, Plaintiffs filed a motion to disqualify Kohut “from any further participation in this case” based on conflicts of interests arising from its past and present representation of the Company and Defendants. Specifically, Plaintiffs argued disqualification was required based on the conflicts of interest arising from: (1) Kohut’s concurrent representation of the Company and Defendants; (2) Kohut’s successive representation of the Company and Defendants concerning the disputes over the Company’s operations; and (3) the need for Kohut to testify in this lawsuit about the services it provided to the Company and Defendants. Here, the trial court concluded disqualification was mandatory because: (1) Defendants and the Company had conflicting interests because the Company is the true plaintiff in this derivative suit that Plaintiffs brought against Defendants on the Company’s behalf; and (2) Kohut previously represented the Company concerning some of the issues raised in this suit, and a substantial relationship therefore existed between that representation and Kohut’s representation of Defendants in this lawsuit. The Court of Appeal concluded the trial court erred because it failed to apply a more specific line of cases that governed an attorney’s successive representation of clients in a derivative lawsuit brought on a small or closely held company’s behalf against the insiders who run the company. View "Beachcomber Management Crystal Cove v. Super. Ct." on Justia Law

The Supreme Court addressed in Goodyear Tire & Rubber Co. v. Haeger, 137 S. Ct. 1178, 1183‐84 (2017), a federal court's inherent authority to sanction a litigant for bad‐faith conduct by ordering it to pay the other side's legal fees. The Court held that such an order is limited to the fees the innocent party incurred solely because of the misconduct—or put another way, to the fees that party would not have incurred but for the bad faith. This appeal stemmed from a suit against T-Mobile for property damage to a building T-Mobile had leased space on the roof of for cell tower equipment. The Second Circuit vacated and remanded the district court's order of sanctions because it was in serious tension with the Court's holding and because the district court was mislead by defendants' submissions in awarding such severe sanctions. View "Virginia Properties, LLC v. T-Mobile Northeast LLC" on Justia Law

Adofo Minka was held in direct criminal contempt by the Hinds County Circuit Court for unprofessional and contumacious behavior during the trial of his client which resulted in a mistrial. Minka was fined $100 and ordered to pay the costs of the jury in the amount of $1,350. Minka appealed, arguing: (1) he did not improperly comment during opening statements on a potential sentence his client might receive, which triggered a sua sponte objection from the trial court and was a key basis for the State’s request(s) for a mistrial; (2) his comments did not warrant criminal sanction because counsel have broad latitude during opening statements and closing arguments; (3) the record did not support a finding beyond a reasonable doubt that any of Minka’s comments or conduct constituted criminal contempt; and (4) even if the Mississippi Supreme Court affirmed the trial court’s contempt and sanction order, the monetary fine was $650 more than it should have been; therefore, the sanction amount must be reversed, lowered, and rendered. The Supreme Court found no merit in any of the points of contention argued by Minka on appeal. View "Minka v. Mississippi" on Justia Law

In a reciprocal discipline case, the identical discipline in Minnesota to “exclusion from practice” before the U.S. Patent and Trademark Office (USPTO) is an indefinite suspension from the practice of law with no right to petition for reinstatement for a minimum of five years.In this case, the USPTO imposed on Alan Stewart, a Minnesota attorney, what its regulations call “exclusion from practice” for misappropriating unearned fees, among other things. The Director of the Office of Lawyers Professional Responsibility petitioned to impose reciprocal discipline in Minnesota and argued that the identical discipline in Minnesota was disbarment. The Supreme Court indefinitely suspended Stewart with no right to petition for reinstatement for a minimum of five years, holding that the USPTO’s discipline procedures were fundamentally fair and that a five-year suspension would not be unjust or substantially different from the discipline warranted in Minnesota. View "In re Petition for Disciplinary Action against Alan Richard Stewart" on Justia Law

The Judicial Tenure Commission (JTC) filed a formal complaint against 14-A District Court Judge J. Cedric Simpson, alleging three counts of judicial misconduct arising from a 2013 incident where Crystal Vargas, one of respondent’s interns, was involved in a motor vehicle accident near respondent’s home. Vargas immediately called respondent, and he arrived at the scene approximately 10 minutes later. As the investigating officer was administering a field sobriety test, respondent identified himself to the officer as a judge, had a conversation with Vargas without the officer’s permission. Vargas had a breath-alcohol content (BAC) over the legal limit, and she was placed under arrest. Respondent contacted the township attorney who would be handling Vargas’s case, said that Vargas was his intern. Respondent also contacted the attorney to discuss defense attorneys Vargas might retain. After an investigation into respondent’s conduct, the JTC filed its formal complaint alleging that respondent had interfered with the police investigation into the accident, interfered with Vargas’s prosecution, and made misrepresentations to the JTC. The master appointed to the case found by a preponderance of the evidence that respondent’s actions constituted judicial misconduct on all three counts. The JTC agreed with these findings and concluded that respondent’s conduct violated the Michigan Code of Judicial Conduct and also constituted misconduct in office and conduct clearly prejudicial to the administration of justice under Const 1963, art 6, section 30(2). The JTC recommended that respondent be removed from office and that costs be imposed. The Michigan Supreme Court concluded the JTC correctly found that respondent committed judicial misconduct, but it erred by concluding that removal from office was warranted. A suspension of nine months without pay was proportional to the misconduct. View "In re Hon. J. Cedric Simpson" on Justia Law