Justia Legal Ethics Opinion Summaries

Gate Guard filed suit against the DOL seeking a declaration that it was in compliance with the Fair Labor Standards Act (FLSA), 29 U.S.C. 201 et seq., and attorneys' fees if it prevailed. Before Gate Guard served the complaint, the DOL filed its own FLSA enforcement action against Gate Guard. The district court found that the DOL's case was weak and granted summary judgment for Gate Guard. The district court awarded Gate Guard attorneys’ fees under the Equal Access to Justice Act’s (EAJA) substantially-justified provision, 28 U.S.C. 2412(d), but denied fees under the EAJA’s bad faith provision, 28 U.S.C. 2412(b). On appeal, the DOL challenged the grant of attorneys' fees. The court concluded that the circumstances giving rise to an award included both the government’s conduct before and during litigation as well as a legally insupportable case. The government’s conduct here was sufficiently egregious to warrant an award under section 2412(b). Accordingly, the court reversed and remanded. View "Gate Guard Svc. v. Perez" on Justia Law

Plaintiffs (a class of 1,593) alleged that Visteon failed to deliver timely notice to ex-employees, offering them an opportunity to continue health insurance at their own expense, under the Consolidated Omnibus Budget Reconciliation Act of 1985 (COBRA). An employer has 44 days after the end of a person’s employment to provide notice and essential details, 29 U.S.C. 1166(a)(2). The court found that Visteon had provided untimely notice to 741 former employees, and that the notice averaged 376 days late for those persons. The court awarded $2,500 to each class member who had received untimely notice (a total of about $1.85 million), a sum that does not depend on how long the delay was for any given person. While the suit was pending, Visteon was reorganized in bankruptcy. The plan provides that debts of this kind will be paid 50¢ on the dollar, so each of the 741 will receive $1,250. The court also ordered Visteon to pay class counsel $302,780 as attorneys’ fees plus costs of about $11,000. The Seventh Circuit affirmed the award of attorneys’ fees, but otherwise dismissed plaintiffs’ challenge to the penalty as untimely, having been filed several months after the district court’s delayed entry of judgment. View "Pierce v. Visteon Corp." on Justia Law

This was a legal malpractice case. Defendant Michelle Myer-Bennett filed a peremptory exception of peremption asserting plaintiff Tracy Lomont filed her malpractice claim beyond the three-year peremptive period set forth in La. R.S. 9:5605. Lomont opposed the exception, arguing the peremptive period should not have applied because Myer-Bennett engaged in fraudulent behavior which prevented application of the peremptive period. Lomont hired Myer-Bennett to represent her in a divorce and related domestic matters, which included partitioning the community property. Citibank obtained a default judgment against John Lomont (the ex-husband) on a delinquent account. Citibank recorded the judgment in the mortgage records in Jefferson Parish as a lien against the home. Lomont attempted to refinance the mortgage on the home and learned from the bank that the settlement agreement, giving her full ownership of the home, was never recorded in the mortgage and conveyance records. Lomont contacted Myer-Bennett to advise her of the problem. According to Myer-Bennett, because it was her standard practice to record such documents, she initially believed Lomont was given inaccurate information by the bank. Upon investigation, Myer-Bennett discovered that she had not recorded the agreement. Myer-Bennett recorded the agreement the next day, September 30, 2010. In December 2010, Lomont was notified that her application to refinance the loan was denied because of Citibank’s lien on the property. According to Myer-Bennett, once she became aware of the Citibank lien she discussed with Lomont the fact she committed malpractice and gave Lomont several options to proceed, including hiring another lawyer to sue her, or allowing Myer-Bennett to file suit against John Lomont and/or Citibank to have the lien removed. Myer-Bennett stated. Lomont chose not to pursue a malpractice action, but wanted defendant to fix the problem. Lomont denied Myer-Bennett ever notified her she had committed malpractice. Lomont contended Myer-Bennett never mentioned malpractice in December 2010, but simply advised she would have the Citibank lien removed from the property by filing lawsuits against John Lomont and Citibank. The district court sustained the exception of peremption and the court of appeal affirmed. Based on the facts of this case, the Supreme Court found defendant committed fraud within the meaning of La. R.S. 9:5605(E). Thus, the peremptive periods contained in La. R.S. 9:5605 were not applicable and plaintiff’s legal malpractice claim was governed by the one-year prescriptive period in La. C.C. art. 3492. Further, the facts of this case supported an application of the doctrine of contra non valentem. Because the Court found plaintiff filed suit within one year of discovering defendant’s malpractice, the Court held the lower courts erred in sustaining defendant’s exception of peremption. View "Lomont v. Myer-Bennett" on Justia Law

Pro se plaintiff George Farmer, a resident of Colorado and a licensed attorney, sued defendant Banco Popular under federal and state law to challenge Banco’s demand that he pay off the full amount owed under a $150,000 Home Equity Line of Credit (HELOC) his deceased father obtained in 2001. In 2012, the parties informed the district court they had reached a settlement: Banco was to pay Farmer $30,000 and forgive some principal, unpaid interest, and attorney’s fees. Farmer would pay $137,380.94 in satisfaction of the HELOC, due later that year. Farmer “began to negotiate a number of the . . . terms of the draft agreement.” Banco “sent Farmer the completed settlement agreement, but Farmer sought changes to the exhibits.” These exhibits included a deed in lieu of foreclosure and a satisfaction of mortgage. After Farmer received the revised exhibits he still would not sign the settlement agreement, but “again sought more changes, including the amount, timing, and structure of the payment.” Banco ultimately filed a motion to enforce the settlement agreement. Notwithstanding his prior representations to the court, Farmer sought to reduce his net payment of $107,380.34 under the terms of the agreement to $100,000, but pay it by October 1 rather than by October 15. The court held another hearing on September 10 at which Farmer again told the court the settlement was fine: “‘[W]e are all in agreement to enforce the settlement,’ and ‘the only thing that remains is the date that my payment is due.’” The parties then agreed that Banco would not pay Farmer $30,000 as previously agreed, but instead, Farmer would pay Banco $107,380.34 by November 15, 2012. “Banco Popular sent Farmer an agreement reflecting the new amount and due date, but instead of signing, Farmer asked for changes and additions. Banco Popular refused most of those changes and asked Farmer to sign the revised agreement, which he never did.” A prior Tenth Circuit decision recited, in detail, Farmer’s ongoing conduct that led the district judge to “warn that he would impose the most severe sanctions and penalties if the parties did not comply with his order” enforcing the settlement. "Now here we are again:" Farmer appealed the district court order imposing fees and costs on him as a punitive sanction. The Tenth Circuit affirmed the district court's order, as modified: sanctions imposed on Farmer in the form of fees and costs due and payable to Banco totaled $50,824.53; Farmer was admonished that further prolongation of this appeal absent good cause would result in the Court imposing its own monetary sanctions on him pursuant to Fed. R. App. P. 38. The Clerk of Court was directed to initiate a formal attorney disciplinary proceeding for the Court to consider further whether additional discipline is appropriate. View "Farmer v. Banco Popular" on Justia Law

Jensen defaulted on a credit card. Her debt was sold to Midland, which retained the Pressler law firm for collection. Midland obtained a $5,965.82 default judgment and served an information subpoena and questions on Jensen. The information subpoena issued under New Jersey Rule 1:9-1, which allows attorneys to issue subpoenas in the name of the clerk of court, bearing the clerk’s signature, although the clerk did not sign the subpoena and likely is unaware of it. Pressler listed “Terrence Lee” on the clerk’s signature line. Lee had never worked as a court clerk; he had been County Clerk, but left that position years earlier. Jensen knew Lee was not clerk of the Superior Court. Jensen sent Pressler a letter, calling the subpoena “fraudulent,” but answered the subpoena questions. Jensen unsuccessfully moved to vacate the state court judgment against her, then filed a putative federal class action against Pressler and Midland, alleging violation of Fair Debt Collection Practices Act, 15 U.S.C. 1692e., which prohibits making false, misleading, or deceptive statements in the collection of consumer debts. The Third Circuit affirmed summary judgment, finding that the misuse of Lee’s name was not a material false statement. A materiality requirement is subsumed within the “least sophisticated debtor” standard that governs FDCPA claims. View "Jensen v. Pressler & Pressler" on Justia Law

Plaintiff Finton Construction, Inc. (FCI) sued defendants Bidna & Keys, APLC (B&K), Howard Bidna, and Jon Longerbone (collectively defendants) for conversion, receipt of stolen property, and injunctive relief. These causes of action arose from defendants’ receipt of an allegedly stolen hard drive pertinent to a pending case in Los Angeles. Defendants were the attorneys of record in that case. They moved to dismiss under the anti-SLAPP statute, arguing the litigation privilege applied and the complaint failed to state a cause of action as a matter of law. The trial court granted the motion, finding defendants’ actions privileged and that plaintiff had failed to demonstrate a possibility of prevailing on the merits. After review of the parties' arguments on appeal, the Court of Appeal found FCI’s conduct with respect to this entire case "demonstrative of a particularly nasty type of scorched earth tactics." A purportedly stolen hard drive, which was placed in the hands of defendants solely for litigation purposes, has resulted in an attempt to disqualify counsel and two efforts to depose counsel in the underlying case, a police report, complaints to the State Bar of California, and this entirely derivative and unmeritorious second lawsuit. "FCI’s overreach does not suggest zealousness or righteousness, but a calculated effort to undermine the parties in the underlying case by turning their attorneys into fellow defendants. . . . [W]hile [all attorneys] owe their clients a duty to zealously represent them, that zealousness does not trump the duty they own the courts and the judicial process to prosecute only lawsuits with merit. The type of uncivil behavior and specious tactics demonstrated by filing this case represents conduct that brings disrepute to the entire legal profession and amounts to toying with the courts." Less than 48 hours prior to oral argument, the parties notified the Court they had reached a settlement. The court, however, declined the parties’ request to dismiss the appeal. "The lack of civility demonstrated in this case is a matter of public interest. Moreover, while we cannot be certain, it appears that FCI deliberately decided to keep this action pending until the last possible moment in order to avoid the opinion we write today. We therefore decide in defendants’ favor and publish this case as an example to the legal community of the kind of behavior the bench and the bar together must continually strive to eradicate." View "Finton Construction, Inc. v. Bidna & Keys, APLC" on Justia Law

The United States filed a petition for a writ of mandamus challenging a district judge’s policy restricting the pro hac vice admission of government attorneys. After the petition was filed, the district judge reversed his previous order denying an attorney in this case pro hac vice admission. The court concluded that the case was not moot and that the controversy remains live where it was reasonably likely that the judge will again deny the pro hac vice applications of attorneys for the United States; while the reversal of the challenged order did not render this controversy moot, it rendered a formal writ of mandamus a superfluous or ineffective remedy here; in this case, the judge acted outside his discretion by failing to provide a valid reason to deny the attorney's application for pro hac vice admission; the judge committed clear error; the first and second Bauman v. U.S. District Court factors weighed in favor of issuing mandamus when the petition was filed, and weigh in favor of offering guidance to the district court; the fact that the judge's order in this case was not an isolated occurrence weighed in favor of granting mandamus relief when the petition was filed; the district court's order raises important problems or issues of first impression and weighed in favor of mandamus relief when the petition was filed and weighs in favor of offering guidance to the district court even though a formal writ is no longer necessary; and issuing a formal writ would have been an appropriate remedy but for the judge’s voluntary cessation. Accordingly, the court denied the petition without prejudice. View "USA V. USDC-NVR" on Justia Law

Messerli law firm obtained a default judgment for its client, Capital One against Scheffler, a former debt collector. Having learned of Scheffler’s reputation as “the most litigious debtor” in Minnesota, Messerli instructed its employees not to contact Scheffler. Scheffler claims he nonetheless sent a cease-and-desist letter to Messerli, which says it received no letter. Messerli attempted to enforce the judgment by serving Scheffler with a garnishment summons. Scheffler returned an exemption Form, claiming that all of the money the bank had frozen was protected, but giving no reason why it was protected. He asserted that the source of the money was “[his] butt,” that he was entitled to death benefits, and “I told you that you were wasting your time.” Scheffler’s attorney sent a letter asking Messerli to honor the claimed cease-and-desist request and asserting that Scheffler was “judgment proof.” Scheffler, acting pro se, sued Messerli under the Fair Debt Collection Practices and Fair Credit Reporting Acts and state laws. The Eighth Circuit affirmed dismissal. Even if there were a cease letter, Messerli’s communications did not violate it. A creditor may communicate with a debtor after receiving a cease letter “to notify the consumer that the debt collector or creditor may invoke specified remedies,” 15 U.S.C. 1692c(c)(2), which is what the garnishment letter was. Messerli was also permitted to request Scheffler’s credit report, 15 U.S.C. 1681b(a)(3). View "Scheffler v. Messerli & Kramer P.A." on Justia Law

After prevailing in their administrative proceedings, appellants sought from DCPS payment for attorney fees under the Individuals with Disabilities Education Act's (IDEA), 20 U.S.C. 1415(i)(3)(B), fee-shifting provision at the rate of $250 per hour. The district court rejected the claim to more than $90 per hour - the statutory rate in the D.C. Criminal Justice Act, D.C. Code 11-2604(a) - and held that the promise of payment in the court appointments foreclosed any greater recovery. The court agreed with appellants that nothing in the orders appointing counsel can preempt IDEA fee shifting, and that the fallback compensation offered by the D.C. Courts is not a proper factor in determining the hourly rate for statutory fee shifting. Accordingly, the court reversed and remanded with instructions. View "Price v. District of Columbia" on Justia Law

In a prior litigation, FLIR filed suit against their former employees for, among other things, misappropriation of trade secrets. After the former employees prevailed in the underlying action, they obtained a ruling that the misappropriation of trade secrets claim had been brought against them in bad faith, which resulted in an order that FLIR pay the former employees their attorney fees and costs in an amount exceeding $1.6 million. Thereafter, the former employees brought the instant malicious prosecution action against Latham, the attorneys who had represented FLIR in the underlying action. The trial court granted Latham's motion to strike the complaint under Code of Civil Procedure section 425.16, the so-called anti-SLAPP statute. The former employees principally contend that the interim adverse judgment rule does not preclude this malicious prosecution action because the trial court’s finding of bad faith after a bench trial in the underlying action negates its prior ruling denying summary judgment. The court concluded that this hindsight approach is inconsistent with a core principle of the interim adverse judgment rule - namely, that an interim ruling on the merits establishes probable cause in the underlying action, even though that ruling is later reversed by the trial court, a jury, or an appellate court. Accordingly, the court affirmed the judgment. View "Parrish v. Latham & Watkins" on Justia Law