California Bar Races to Enact “Rat” Rule 8.3

The California State Bar’s Standing Committee on Professional Responsibility and Conduct (COPRAC) spent most of its meeting on Friday January 13 drafting a California version of ABA Model Rule 8.3. Model Rule 8.3, entitled “Reporting Professional Misconduct” has been referred to as the “rat” or “squeal” Rule. It says:

(a) A lawyer who knows that another lawyer has committed a violation of the Rules of Professional Conduct that raises a substantial question as to that lawyer’s honesty, trustworthiness or fitness as a lawyer in other respects, shall inform the appropriate professional authority. …

(c) This Rule does not require disclosure of information otherwise protected by Rule 1.6 or information gained by a lawyer or judge while participating in an approved lawyers assistance program.

California, alone among United States jurisdictions, has no version of Rule 8.3. When California’s Rules of Professional Conduct were revised between 2014-2018, consideration was given to adopting a version of Rule 8.3, but a subcommittee of the rules revision commission voted not to recommend its adoption (see Carr – Model Rule 8.3: The Argument Against.) The subcommittee explained its reasoning this way:

On balance, the members of the drafting team agree with the Board’s prior decision not to recommend a reporting requirement. The pros of adopting a reporting requirement (whether in the mandatory form of ABA MR 8.3 or a hybrid permissive/mandatory form along the lines of RRC1’s proposed rule) include:

1. improving public protection by requiring lawyer reporting of certain known violations of the rules that raise a substantial question about a lawyer’s “honesty, trustworthiness or fitness as a lawyer;” and

2. bringing California’s rules more in line with the ABA Model Rules.

There are also significant cons to a reporting requirement; either the Model Rule or RRC1 hybrid approach would:

1. require a lawyer to determine whether a known violation raises a substantial question as to (or implicates) the lawyer’s honesty, trustworthiness or fitness as a lawyer;

2. despite the recognition that reporting could be trumped by the duty of confidentiality with respect to information learned in the course of representation of a client, pose a potential for conflict with that rule, or with the attorney-client relationship, to the extent lawyers might feel obligated to discuss waiver of confidentiality to further the reporting interests of the lawyer rather than the client’s own interests;

3. pose a potential for conflicts with a lawyer’s duty of loyalty if reporting posed a risk of adversely affecting a current or former client’s interests; and

4. potentially be viewed as inconsistent with the discretionary reporting policy reflected in Canon 3D(2) of the California Code of Judicial Ethics that states: “Whenever a judge has personal knowledge, or concludes in a judicial decision, that a lawyer has committed misconduct or has violated any provision of the Rules of Professional Conduct, the judge shall take appropriate corrective action, which may include reporting the violation to the appropriate authority.” (Emphasis added.)

On balance, the drafting team agrees that the cons outweigh the pros, particularly given that California has never had such a reporting requirement, and that the analysis required for lawyers to determine the scope of any reporting requirement seems inconsistent with this Commission’s charge to retain the historical nature of the California Rules as a “clear and enforceable articulation of disciplinary standards.”

Oh, the carefree days of our (relative) youth!

The Girardi Scandal broke in December 2020 and since then the days of the State Bar of California have not been carefree (see Kafkaesq: The Widening Gyre of Girardi-Gate), especially after the State Bar admitted that it had made mistakes in handling the many complaints against Girardi. Notable is the way the Los Angeles Times has not only covered the story but is driving story, including filing an action in the California Supreme Court to push the State Bar into disclosing the Girardi files. On October 28, 2022, the Los Angeles Times published a story on California’s lack of a rule requiring attorneys to report misconduct (“When It Comes to Crooked Colleagues, California Attorneys Can Remain Silent“). Within weeks, the push was on the enact a California version of Rule 8.3. That push gained enormous momentum when California Senator Tom Umberg, chair of the Judiciary Committee, introduced Senate Bill 42, which would add new section 6090.8 to the California Business and Professions Code:

6090.8. (a) A licensee of the State Bar who knows that another licensee has engaged in professional misconduct that raises a substantial question as to that licensee’s honesty, trustworthiness, or fitness as an attorney in other respects, shall inform the State Bar. (b) This section does not require disclosure of information otherwise protected by the attorney-client privilege or information gained by a licensee while participating in the Attorney Diversion and Assistance Program.

SB 42 seems a transparent move to force the Supreme Court (with the help of its administrative arm, the State Bar of California) to enact Rule 8.3. Pronto! And it is working. The proposed version of Rule 8.3 that COPRAC drafted in real time on Friday January 13 will be put out for a truncated 30 days public comment period and then moved directly on the Board of Trustees agenda for approval, rather than allowing COPRAC to follow its regular procedure of evaluating the public comment and refining its work product. The short public comment period will make it difficult for local bar associations, who work slowly, typically requiring their legal ethics committees to evaluate proposals first, to offer public comment. And everyone is signaling that something had to put in place quickly before the Legislature imposes its own, poorly thought-out statute on the State Bar and the lawyers of California. It seems hard to imagine that the California Supreme Court will say no.

One of the flaws in Model Rule 8.3 as noted by the drafting committee in 2016 is that successful prosecution requires the discipline authority to prove by clear and convincing evidence that the attorney knew a complex thing: that another lawyer has (1) violated the Rules of Professional Conduct and (2) that the violation raises a substantial question as to the lawyer’s honesty, trustworthiness or fitness as a lawyer. As a result there have not been a lot of prosecutions for failure to report. Rule 8.3 is not likely to have a substantial impact on public protection. It would have had no impact on the Girardi matter; the (as framed by the media coverage, without first hand knowledge) problem was not that the State Bar of California did not know, but that it knew but did nothing

But it really isn’t about public protection. It is about public confidence in the State Bar of California. By enacting Rule 8.3, the State Bar demonstrates that it is doing something, even if that something is not particularly helpful.

How Big is Your E? Ethics Rules Large and Small

Shappell Socal Rental Properties v. Chico’s FAS, Fourth App. Dist., Div. 3, case no. G060411, filed 10/17/22.

Ethics lawyers, like every group of professionals, have a jargon all their own. One thing you might hear them talk about is “ethics with a big E” as opposed to “ethics with a small e.” Ethics with a big E refers to the black letter rules and statutes setting forth norms of lawyer behavior. This includes the Rules of Professional Conduct, sometimes codified as statutes, and other statutes, in California the statutes in the State Bar Act (Bus. & Prof. Code section 6000 et seq.) Ethics with a small “e” is taken to mean an undefined territory more vast, all the norms of the legal profession that have not been reduced to “black letter” rules. One principal difference is consequence; violation of a Big E rule raises a presumption of unfitness to practice and justifies discipline, but the sanction for violating a small e rule is usually significantly less, maybe even just the opprobrium of fellow lawyers or a court. A useful concept to keep in mind is the difference between normative ethics (absolutely Big E rules) and descriptive ethics, i.e. what lawyers actually do, which can be Big E but is mostly small e.

The distinction is important in understanding the incivility crisis. For some years now, the profession and the courts have been moaning about the decline of civility in the profession. This has produced a torrent of task-forces, reports, civility codes and much hand-wringing about what to do about it. Part of the problem is a lack of Big E rules, at least in California. California did have a civility rule, former Bus. & Prof. Code section 6068(f), which stated that it was the duty of lawyer to avoid “offensive personality.” Three decades ago, I prosecuted a lawyer for offensive personality. He had a habit of losing his temper in depositions and doing things like throwing chairs around the room. Definitely not civil. California lost the “offensive personality” rule when the Ninth Circuit found it unconstitutionally vague in US v. Wunsch 84 F.3d 1110 (1996). Now, the most recent civility proposals in California are looking at beefing up Rule of Professional Conduct 8.4(d) which states that “[i]t is professional misconduct for a lawyer to:…(d) engage in conduct that is prejudicial to the administration of justice…” (see Committee on Professional Responsibility and Conduct meeting agenda 10/14/22, item F.1) and other rules.

Small e violations are not without consequence, even if that consequence is not discipline. Shappell illustrates this. The Court of Appeal reversed the order denying the motion to vacate the default judgment because Shappell’s counsel violated the rule that “[a]n attorney has both an ethical and statutory obligation to warn opposing counsel, if counsel’s identity is known, of an intent to seek a default and to give counsel a reasonable opportunity to file a responsive pleading.” This rule cannot be found in the realm of Big E. Instead it comes from case law, specifically LaSalle v. Vogel (2019) 36 Cal.App.5th 127, 137. In LaSalle, the Fourth District Court of Appeal concluded “unequivocally, and without qualification…. that [this] obligation is rooted in decades of case authority and… is reinforced by a statutory obligation arising under Code of Civil Procedure section 583.130.” Justice Bedsworth, writing for the court, cited the small e California civility guidelines as cementing this duty as an ethical rule:

In contrast to the stealth and speed … courts and the State Bar emphasize warning and deliberate speed. The State Bar Civility Guidelines deplore the conduct of an attorney who races opposing counsel to the courthouse to enter a default before a responsive pleading can be filed. (Fasuyi v. Permatex, Inc. (2008) 167 Cal.App.4th 681, 702, 84 Cal.Rptr.3d 351 (Fasuyi), quoting section 15 of the California Attorney Guidelines of Civility and Professionalism (2007).) Accordingly, it is now well-acknowledged that an attorney has an ethical obligation to warn opposing counsel that the attorney is about to take an adversary’s default. (Id. at pp. 701-702, 84 Cal.Rptr.3d 351.) LaSalle was previously discussed on the California Legal Ethics blog where I characterized it as A Judicial Cri de Coeur on Civility. It is an impressively written opinion but it still rests on small e as the court’s dismissal of Bellm v. Bellia (1984) 150 Cal.App.3d 1036 (LaSalle at 136) and its distinction of “legal” v. “ethical” shows. Big E is all about the law, the law that can get you suspended or disbarred.

But what about Code of Civil Procedure 583.130 cited as supporting a duty to warn before taking default? It says “It is the policy of the state that a plaintiff shall proceed with reasonable diligence in the prosecution of an action but that all parties shall cooperate in bringing the action to trial or other disposition.” This is real black letter law, right in the Code of Civil Procedure! Could this be a route to get from small e to Big E? California Bus. & Prof. Code section 6068(a) says that it is duty of lawyer to support the laws of the state of California. The State Bar Court Review Department held in In the Matter of Lilley (Review Dept. 1991) 1 Cal. State Bar Ct. Rptr. 476, that “that the Supreme Court interprets section 6068(a) as a conduit by which attorneys may be charged and disciplined for violations of other specific laws which are not otherwise made disciplinable under the State Bar Act.” The Lilley court was unclear as to whether this conduit was so wide as to admit a violation of a statute not in the State Bar Act but 6068(a) is broadly worded. The statute is also vague about what cooperation entails, much as Rule 8.4(d) is vague in lacking anything like a definition of the prohibited conduct beyond “prejudicial to the administration of justice.”

Vague but Wunsch-caliber vague? So far OCTC has shown no appetite for creative theories justifying civility prosecution. But small e can make a big difference in in the civil courts, especially in the Fourth Division.

Sticking By His Guns

In the Matter of Thomas, Review Dept. State Bar Court, 15-O-14870; SBC-20-O-00029 (Consolidated). filed 8/26/22. Respondent lawyer was admitted to practice in 1978. Despite a lack of prior discipline, the Review Dept. upheld a hearing judge’s recommendation of disbarment. Respondent engaged in a pattern of frivolous and harassing litigation over a period of eight years, which generated sanctions of $188,350.64. None of the sanctions were reported to the State Bar and none of this amount of was paid. The original litigation began in 2012 with a real estate dispute involving the True Harmony company. The lawyer was found to have violated section 6068, subdivision (c), by

“(1) making multiple claims and argument slacking any legal or factual basis and filing and pursuing an untimely motion (despite being forewarned that the motion was without merit and should be dismissed) in the interpleader action;

(2) filing a frivolous appeal of the interpleader action, which lacked any merit and was prosecuted for the improper purpose to harass and increase litigation costs;

(3) filing a motion for reconsideration in the True Harmony matter, which had no basis in law and unnecessarily increased the costs of litigation; and

(4) repeatedly pursuing improper appeals and filing frivolous and harassing briefs and/or motions, which unnecessarily increased the costs of litigation in the appeal of the True Harmony matter.

The hearing judge found culpability under section 6068, subdivision (c), for [the lawyer’s] use of abusive litigation tactics where he initiated and maintained multiple claims and defenses, at the trial and appellate levels, which were foreclosed by legal authority.”

The lawyer was also found to have violated former Rule 5-100 by threatening criminal charges against opposing counsel to gain an advantage in the civil litigation. He was also found culpable of violating Business and Professions Code section 6103 by failing to pay the sanctions and section 6068(o)(3) by failing to report the sanctions. Aggravation was found in a pattern of misconduct, significant harm to the opposing party and the administration of justice, and indifference toward rectification of the misconduct.

The lawyer made a number of arguments, including collateral attacks on the civil judgments, Constitutional objections, and unclean hands by the Office of Chief Trial Counsel (OCTC) in not investigation his claims of misconduct by opposing counsel. The Review Department rejected these arguments. Giving substantial weight to aggravating factors, including a pattern of misconduct spanning years, it recommended disbarment. Respondent now has the option of petitioning the Supreme Court, which he has vowed to do. In this closing argument at trial, Respondent stated that he was going to “stick to his guns” and so far he has been true to his word.

“Ethics is a Club They Beat You With”

“Ethics is a club they beat you with…”

Former President of the Association of Professional Responsibility Lawyers

Brawerman v. Loeb & Loeb, Second App. Dist., Div 8, case no. B305802, filed 8/3/22.

The plaintiffs hired the defendant law firm to advise him in a financial transaction. The fee agreement contained an arbitration clause. Defendant law firm had an associate who was licensed in New York but not California work on the matter, contributing 382 hours to the total of 928 billed by the firm. The relationship went south and plaintiffs filed this action against the law firm and the unlicensed-in-California associate for professional negligence and breach of fiduciary duty. Defendants moved to compel arbitration. Before arbitration, plaintiffs discovered the licensing status of the associate and moved to remand the matter to the trial court, arguing that the unlicensed status of the associate meant the entire fee agreement, including the arbitration was clause was void due the fraud. The arbitrator denied the motion, finding the arbitration clause severable. The decision after arbitration found the firm and the associate liable but concluded that the plaintiffs suffered no damages. The award ordered disgorgement of $138,075 in fees paid for the unlicensed associate’s services and $94,933 for the plaintiff’s fees incurred in the arbitration in connection with litigating that issue. The trial court confirmed the arbitration and the inevitable appeal followed.

On appeal plaintiffs again argued that entire fee agreement was tainted with fraud due the associate’s lack of California licensing and the law firm’s ethical misconduct in having the unlicensed associate work on the case. Citing one of the most significant California Supreme Court cases of the recent past, Sheppard, Mullin, Richter & Hampton, LLP v. J-M Manufacturing Co., Inc. (2018) 6 Cal.5th 59, 72, they contended the ethical misconduct meant the arbitration award must be voided and the matter remanded to the trial court because “the arbitration has been undertaken to enforce a contract that is ‘illegal and against the public policy of the state.” (Sheppard, supra, 6 Cal.5th at p. 73.)

Defendants based their argument on another heavyweight pronouncement from the California Supreme Court, this one from the last century, Birbrower, Montalbano, Condon & Frank v. Superior Court (1998) 17 Cal.4th 119. Birbrower held that an unlicensed attorney’s illegal practice of law pursuant to the retainer agreement does not render the entire retainer agreement illegal.

In this Clash of the Ethics Titans, the Court of Appeal found Birbrower persuasive and Sheppard distinguishable. They upheld the trial court’s confirmation of the arbitration award. Along the way, they chastised plaintiff’s counsel for not even discussing Birbrower until page 79 of their reply brief and remanded counsel that Rule of Professional Conduct 3.3(a)(2) requires counsel to disclose authority known to be adverse to their position (see Rule 3.3: Another Shot Across the Bow.)

The Court of Appeal demurred on directly addressing the ethics issues involved in the firm’s assignment of an unlicensed associate to provide legal services to a California client in California, despite plaintiffs’ invocation of yet another heavyweight California Supreme Court case In Re Rose (2000) 22 Cal.4th 430. “We are reviewing a lower court’s order confirming an arbitration award, not conducting attorney discipline proceedings. And our jurisdiction has been invoked by appeal, not through any original petition. In re Rose has no application here.” So the question of whether lawyers of the defendant law firm might have violated former Rule of Professional Conduct 1-300(A) (current Rule 5.5(a)(2)) will have to be answered in another forum, if it is to be answered at all.

While it doesn’t exactly fit the mould, Brawerman reconfirms a truth about legal ethics captured in the pithy quote cited above from a former president of the Association of Professional Responsibility Lawyers (APRL). In the civil arena, legal ethics are largely invoked in arguments about money, usually to justify non-payment of money. Here they were invoked in an unsuccessful effort to get another shot at proving up a claim of damages in front of a jury, a jury presumable less lawyer friendly than the arbitrator. It seems unlikely that this case will wind up in the pantheon of Supreme Court Titans, so the plaintiffs will likely have to be content with the disgorgement of fees.

Rule 3.3: Another Shot Across the Bow

Shiheiber v. JP Morgen Chase Bank, First App. Dist., Div. 2, A160188 filed 7/26/22.

The Court of Appeal upheld sanctions imposed on counsel by the trial court for violations of local trial court rules. Division 2 found sanctioned counsel’s argument lacking in a many areas, and bordering on frivolous, stating that they were publishing the opinion “to make clear that, in the future, an appellate argument such as this that is so lacking in even potentially persuasive value will indeed carry the possibility of sanctions as a frivolous appeal.” Among the leading infirmities was counsel’s failure on appeal to discuss the leading authority contrary to her position that the trial court lacked the authority to awared sanctions, the Bragg case. The Court reminded us that Rule 3.3(a)(2) provides that a lawyer shall not “fail to disclose to the tribunal* legal authority in the controlling jurisdiction known* to the lawyer to be directly adverse to the position of the client and not disclosed by opposing counsel, or knowingly misquote to a tribunal the language of a book, statute, decision or other authority.” It also reminded us that it reminded us about Rule 3.3 once before in Davis v. TWC Dealer Group, Inc. (2019) 41 Cal.App.5th 662, 678.

The Court of Appeal neither sanctioned counsel or referred her to the State Bar. But it told us in certain terms that it could do those things and just might if it was faced with similar failures to comply with Rule 3.3(a)(2) in the future. The circumstances of this case, the relatively light sanction and the fact that bad faith was not found on counsel’s part militated against those measures in this case. The first part of Rule 3.3(a)(2) is a new Rule in California, adapted from the ABA Model Rules and adopted in 2018. There are no discipline cases applying it that can be found but the possibility of discipline in an appropriate case cannot be rules out.

At least one Court of Appeal has fired two warning shots concerning Rule 3.3. When and if they will direct their fire directly on the target remains to be seen.

Rule 3.7: One of These Things Is Not Like the Others

Lopez v. Lopez, Second App. Dist., Div. 4, case no. B315959, filed 7/20/22.

The Second Appellate District has reversed a trial court ruling disqualifying a lawyer from representing his wife in litigation where the lawyer was likely to be called as a witness. This case provides one of those ‘teaching moments’ on a topic that is the subject of some confusion among lawyers, and, apparently, some judges: the differences between the California Rules of Professional Conduct and the American Bar Association (ABA) Model Rules of Professional Conduct.

Some of the confusion may be the result of the way professional responsibility has been taught by law schools. I will offer myself up as an example. I went to an ABA-accredited law school in Los Angeles, longer ago than I care to remember. So long ago that we actually studied the 1969 ABA Code of Professional Responsibility, with its confusing hodgepodge of Canons, “ECs” (ethical considerations) and “DRs” (disciplinary rules.) We also learned a little of the then recently adopted ABA Model Rules. But our instruction never acknowledged, let only elucidated, the then-existing 1975 California Rules of Professional Conduct, the actual discipline rules that would be binding on the majority of us who would go on to practice in California. The California rules were not tested on the version of the Multi-state Professional Responsibility Examination (MPRE) that I took and passed in 1986. I did not even realize that California had its one distinctly different set of disciplinary rules until March 27, 1989, the day I began work at the State Bar of California.

Legal ethics education has improved since those days. My impression is that even law schools that aspire to be “national” make some effort to acquaint students with the California rules. I know from my own teaching experience is that it is difficult to teach two very different sets of professional responsibility rules. The adoption of California’s own version of the Model Rules in 2018 has made it easier, although California’s rules have many differences with the Model Rules, including our version of the lawyer witness rule, Rule 3.7, which tripped up the trial judge in the Lopez case. Unlike the Model Rule 3.7, our Rule allows the lawyer to serve as a witness with the informed consent of the client, as did former California Rule 5-220 (the 1975 California rules did not address this issue.) But that exception is not absolute; Comment 3 states that a judge may still disqualify a lawyer who will be a witness if necessary to protect the trier of fact from being misled or the opposing party from being prejudiced.

This is a useful reminder that disqualification is a judicial remedy that is broader than the rules of professional conduct and may be invoked in the exercise of a trial judge’s discretion to prevent unfairness. And, in the trial judge’s defense, it is clear that they are situations where the ABA Model Rules can be utilized as guidance on California questions, even after the adoption of our new rules in 2018. Pre-2018 case law held that “the ABA Model Rules of Professional Conduct may be considered as a collateral source, particularly in areas where there is no direct authority in California and there is no conflict with the public policy of California.” State Comp. Ins. Fund v. WPS, Inc. (1999) 70 Cal. App. 4th 644, 656. California Rule 1.0 states that the Rules of Professional Conduct “are intended to regulate professional conduct of lawyers through
discipline”; Comment 4 to that Rule states that “ethics opinions and rules and standards promulgated by other jurisdictions and bar associations may also be considered” in addressing ethical issues not related to discipline.

So maybe that trial judge wasn’t so dumb after all. Confusion about the proper role of the California Rules of Professional Conduct still exists as well as geographical reach. Are they just discipline rules, black-letter law like criminal statutes or do they serve a prophylactic role in guiding lawyer conduct. Of course, the answer is both, despite the long-standing California shibboleth about them being only discipline rules. This confusion was what the wacky 1969 ABA Code of Professional Responsibility was trying to address through its three-part structure of Canons, ECs and DRs. Maybe the 1969 Code wasn’t so dumb either.

Isola and the Moral Turpitude Morass

In the Matter of Isola, Review Dept., State Bar Court case no. SBC-20-O-30310, filed 5/22/22, disciplinary recommendation pending before the California Supreme Court.

The Office of Chief Trial Counsel (OCTC) filed a notice of discipline charges pleading 26 counts of misconduct, including acts of moral turpitude, misrepresentation, and misappropriation of funds. It sought disbarment. After 11 days of trial, the hearing judge issued a decision dismissing some of the charges and recommending a two-year actual suspension. Both sides sought review. The Review Dept., a lengthy 46-page decision, finds only two counts of failing to communicate with the client and recommends a 30-day actual suspension.

Can we say that the system worked the way it was supposed to?

Part of the answer depends on the peculiar doctrine of moral turpitude as applied in disciplinary proceedings. The concept was abandoned by the American Bar Association when it wrote the Model Rules of Professional Conduct in the early 1980s but it lives on in California disciplinary jurisprudence through our Business and Professions Code section 6106:

The commission of any act involving moral turpitude, dishonesty or corruption, whether the act is committed in the course of his relations as an attorney or otherwise, and whether the act is a felony or misdemeanor or not, constitutes a cause for disbarment or suspension.

If the act constitutes a felony or misdemeanor, conviction thereof in a criminal proceeding is not a condition precedent to disbarment or suspension from practice therefor.

Bus. & Prof. Code section 6106

Moral turpitude also figures prominently in the statutes governing the criminal conviction referral process. Business and Professions Code section 6101 provides that conviction of a felony or misdemeanor crime involving moral turpitude is a cause for suspension of disbarment. It also requires a criminal court to transmit the record of a criminal conviction of a California lawyer to the State Bar within 48 hours. The State Bar must in turn file the record of any conviction which involves or may involve moral turpitude in the State Bar Court (standing in for the California Supreme Court) within 30 days of receipt. Conviction of any felony, or misdemeanor involving moral turpitude, triggers interim suspension (Bus. & Prof. Code section 6102(a)) and conviction of felony involving moral turpitude is punishable with summary disbarment under section 6102(c).

What is moral turpitude? The California Supreme Court has struggled to define it.

“Moral turpitude is a concept that “defies exact description” [citation] cannot be defined with precision [citation] We have noted, however, that in attorney discipline cases, moral turpitude should be defined with the aim of protecting the public, promoting confidence in the legal system, and maintaining high professional standards. [citation].” In re Grant (2014), 58 Cal. 4th 469, 475–476. Moral turpitude is similar but broader than ABA Model Rule 8.4(b) which states that “It is professional misconduct for a lawyer to:… (b) commit a criminal act that reflects adversely on the lawyer’s honesty, trustworthiness or fitness as a lawyer in other respects.” Promoting confidence in the legal profession means that moral turpitude can reach many kinds of activity not directly related to the practice of law

Grant had been convicted of possession of child pornography (Penal Code section 311.11(a).) The State Bar Court hearing judge determined that the conviction involved moral turpitude and recommended disbarment. “The judge reasoned that the conviction “involve[d] such a serious breach of a duty owed to another or to society, or such a flagrant disrespect for the law or for societal norms, that knowledge of [Grant’s] conduct would be likely to undermine public confidence in and respect for the legal profession,” and is, therefore, a conviction of a crime involving moral turpitude (Grant, at 474.) The Review Department, which had initially determined the crime as one that may or may not involve moral turpitude, thus entitling Grant to an evidentiary hearing, reversed, finding that the admissible evidence did not support a finding of moral turpitude. It recommended three years’ probation with an actual suspension of two years. On petition for review by the Office of Chief Trial Counsel (OCTC, the State Bar’s discipline prosecution office) the Supreme Court held that violation of section 311.11(a) was a crime of moral turpitude per se and thus mandated summary disbarment.

The vague definition of moral turpitude is problematic because it contains an element of subjectivity sometimes approaching Potter Stewart’s famous statement on obscenity (“I can’t define it but I know it when I see it.”) As a result, OCTC’s practice of liberally charging moral turpitude has been the subject of much contention with the professional discipline defense bar. At a recent meeting of a working group of State Bar’s Ad Hoc Commission on the Discipline System, a body charged with studying the fairness of the discipline system, defense counsel representatives proposed adding a probable cause hearing to State Bar discipline procedure, with the goal of culling out unsupported moral turpitude charges at an early stage of the proceeding and promoting settlement. Respondents are reluctant to stipulate to charges of moral turpitude because of the implication of immorality, even though the Supreme Court has stated that gross negligence alone can support a finding of moral turpitude (see In the Matter of Yee (Review Dept. 2014) 5 State Bar Ct. Rptr. ____ , Remke, J. dissenting.) Yee was found culpable of an act of moral turpitude because she mistakenly certified her MCLE compliance from memory without checking her records. The Review Department upheld the decision, provoking a rare dissent from the Presiding Judge of the State Bar Court.

Case law has defined moral turpitude in dramatic terms. “Moral turpitude” is defined as the “general readiness to do evil.” People v. Castro (1985) 38 Cal.3d 301, 313–316. Moral turpitude is defined as ‘everything done contrary to justice, honesty, modesty, or good morals’. In re McAllister, (1939)14 Cal. 2d 602, 603. Moral turpitude has been defined as: ‘An act of baseness, vileness or depravity in the private and social duties which a man owes to his fellow men or to society in general, contrary to the accepted and customary rule of right and duty between man and man.’ In re Boyd (1957) 48 Cal. 2d 69, 70. That the concept is so elastic that is encompasses Ms. Yee forgetting to check her MCLE records as well the most heinous crimes such as murder and child pornography is a measure of how flawed it is.

16 of the 26 discipline charges in Isola alleged acts of moral turpitude in violation of section 6106. None of those charges were upheld, although it is still possible that OCTC will petition the California Supreme Court. Mr. Isola went through 11 days of trial and doubtless had to pay his experienced State Bar defense counsel a lot of money. Because he was found culpable on two charges with a recommendation of public discipline, he will also have to pay $22,136 in costs to the State Bar, according to the latest cost schedule.

Discipline is an adversarial process. Inherent in that is the possibility that parties, and judges, will get things wrong. That is part of why we have review as a matter of right in the State Bar Court and discretionary review in the California Supreme Court. Putting the best face on things, OCTC might say that the system worked exactly as it was supposed to, that its prosecutor was entitled to make her case within the office’s prosecutorial discretion and she should not be second guessed. Given the consequences to Mr. Isola it is hard to credit that view. Vague concepts like moral turpitude invite prosecutorial abuse and this case is not the only example.

SLAPP-shot: Lawyer’s Cross-complaint Gets Iced

Bowen v. Lin, Second App. Dist., Div. 6, case no. B312831, filed 6/6/22, certified for publication 6/23/22.

Fiduciary duty is not a level playing field. The essence of a fiduciary relationship is putting the interests of the other party ahead of your own. One of the incidents of the fiduciary relationship between lawyer and client is the client’s absolute right to discharge the lawyer, for a good reason, for a bad reason, or for no reason at all. This is sometimes difficult for lawyer’s to grasp, as the Bowen case shows.

“Victor and Calvin [Victor’s son] practiced medicine out of an Oxnard office owned by Victor and Yvonne [Victor’s wife.] The office sustained $25,000 in damages when a pipe in an adjacent office started leaking. The Lins hired Bowen as their attorney to demand that the owner of the adjacent office, Cynthia Lau, pay to rectify the water damage. After Lau rejected the settlement demands, Bowen recommended that the Lins sue. Victor and Yvonne agreed, but Calvin did not. Bowen nevertheless named him as a plaintiff in the lawsuit (the Lau case). He estimated that prosecuting the case would cost between $25,000 and $50,000. Over the next three years, the Lins paid Bowen nearly $68,000. Frustrated with ever-mounting costs, Victor told Bowen to cease all nonessential work on the Lau case while Gail [Victor’s daughter], a licensed attorney, tried to reach a settlement with Lau’s estate. Bowen replied that he would not cease work and would not grant Gail permission to settle the case as long as he was counsel of record. Gail then formally substituted in and settled the case.”

“Bowen sued Victor and Yvonne for breach of contract and quantum meruit, seeking to recover the unpaid balance of his fees. Victor and Yvonne cross-complained, alleging that Bowen breached his fiduciary duties, committed malpractice, and failed to execute a written fee agreement. Calvin joined the lawsuit as a cross-complainant.”


“Bowen then filed his own cross-complaint. His first cause of action asserted that Calvin breached his oral contract with Bowen when he stopped cooperating in the Lau case and fired Bowen as his attorney. The second, third, and fourth causes—for intentional interference with contractual relations, intentional interference with prospective economic relations, and negligent interference with prospective economic relations—asserted that Calvin and Gail encouraged their parents to stop cooperating with Bowen, fire him as their attorney, withhold payments due, and work with Gail to achieve a settlement. Bowen’s fifth cause asserted that Victor, Yvonne, and Calvin committed fraud when they induced him to provide legal services in the Lau case—all while providing minimal payments— knowing they would have Gail settle the case on the eve of trial. The sixth cause asserted that all four members of the Lin family conspired to defraud Bowen by encouraging him to work on the Lau case while knowing they would settle it themselves after
substituting him out.”

The Lins filed a SLAPP motion against Bowen’s cross-complaint. The trial court granted with respect to Gail, concluding that she engaged in protected activity and the litigation privilege (Civil Code section 47) meant that Bowen could not prevail on his cross-complaint against her. The trial court denied the motion with respect to Victor, Calvin and Yvonne, finding their communications “probably” did not come within the protection of the litigation privilege. It did not rule on whether Bowen was likely to prevail on his claims. Appeal, like flowers after a spring rain, naturally blossomed.

On appeal, Division 6 found that Victor, Calvin and Yvonne actions were “squarely protected” by the anti-SLAPP statute (Civil Code section 425.16(e)(1):“statement[s] or writing[s] made before a . . . judicial proceeding” and “written or oral statement[s] or writing[s] made in connection with an issue under consideration or review by a . . . judicial body.”) “The “filing, funding, and prosecution of a civil action” are protected acts. (Rusheen v. Cohen (2006) 37 Cal.4th 1048, 1056.). Moreover, as noted above, a “client has the absolute right to change [their] attorney at any stage”, citing the venerable case of Gage v. Atwater (1902) 136 Cal. 170, 172, as well as the more recent case Taheri Law Group v. Evans (2008) 160 Cal.App.4th 482, 491. “The trial court thus erred when it concluded that Bowen’s breach of contract cause of action did not arise from protected activity.

The Court of Appeal reached the same conclusion with respect to the interference causes of action, citing the very recent case of Pech v. Doniger (2022) 75 Cal.App.5th 443, 462, for the proposition that advising clients to terminate an attorney’s services is protected activity. The fraud claims were also found subject to the SLAPP motion because they were based on the same protected communications activity specifically cited by the SLAPP statute.

Bowen tried to counterattack by noting that the Lins had cross-complained against him for malpractice but to no avail. The appellate court found that a malpractice claims does not chill petitioning activity but rather, the threat of a malpractice claim “encourages the attorney to
petition competently and zealously.”

Bowen’s appeal of the trial court’s granting of Gail’s part of the SLAPP motion failed for the same reasons. He attempted to distinguish Taheri by noting that the decision predated current Rule of Professional Conduct 4.2, but that rule is essentially the same as its predecessor, former Rule 2-100(a), which Taheri relied on. The rule was irrelevant in any case; Gail did not represent any party when she communicated with the Lins while they were represented by Bown, and the Rule only applies when the lawyer making the communication represents a party.

The Court of Appeal upheld the granting of the SLAPP motion as to Gail and remanded the matter back to the trial court to decide the issue of whether Bowen might prevail in his causes of action against Victor, Yvonne and Calvin.

While careful not to express an opinion, in discussing the trial court’s determination of that issue on Gail’s part of the SLAPP motion, the high court said this: “the litigation privilege bars liability for “any communication (1) made in judicial or quasi-judicial proceedings; (2) by litigants or other participants authorized by law; (3) to achieve the objects of the litigation; and (4) that ha[s] some connection or logical relation to the action.” (Silberg v. Anderson (1990) 50 Cal.3d 205, 212.) It is “relevant to the second step in the anti-SLAPP analysis in that it may present a substantive defense [the nonmoving party] must overcome to demonstrate a probability of prevailing.” [Flatley v. Mauro (2006) 39 Cal.4th 299, 323.] Whether the privilege shields Gail’s actions is a question of law subject to our independent review. (Kashian v. Harriman (2002) 98 Cal.App.4th 892, 913.) “Any doubt about whether the privilege applies is resolved in favor of applying it.”

So, Mr. Bowen would appear to have his work cut out for him. The important lesson for the rest of us is that clients and their causes of actions are not property and when push comes to shove, the interests of the clients always come first.

Ex-Judge Becomes Ex-Counsel Via Rule 1.12

You Can’t Blame Him for Making a Career Move

Hassett v. Olson, Third App. Dist., case no.C092212, filed 4/20/22, modified and certified for publication 4/13/22. Stephen Baily, while a Superior Court judge in El Dorado County, presided over litigating and issued orders relating to the enforceability of one Cody Bass’s options to purchase two South Lake Tahoe properties. Baily left the bench. He was then employed as co-counsel the trustees of the one of the properties, Dastur, in litigation brought by Hassett, who claimed ownership of the properties. Baily sent a letter to the assigned Judge of the El Dorado Superior Court in his capacity as counsel for Dastur citing his former status as a judge and their social relationship and suggesting the entire El Dorado Superior Court recuse itself. She did and the case was transferred to a Sacramento County judge. Hassett brought a motion to disqualify Baily, citing Rule of Professional Conduct 1.12, which says:

a lawyer shall not represent anyone in connection with a matter in which the lawyer participated personally and substantially as a judge or other adjudicative officer, judicial staff attorney or law
clerk to such a person* or as an arbitrator, mediator, or other third-party neutral, unless all parties to the proceeding give informed written consent.

In support of his motion, Hassett attached Baily’s letter. The trial court granted the motion, based on the inherent power of the court (codified in Code of Civil Procedure section 128, subdivision (a)(5)) to control proceedings in the furtherance of justice. The court cited an “appearance of impropriety”, as well as a violation of Rule 1.12. The definition of “matter” in Rule 1.12 was broad enough to include Hassett’s action, even though he was not a party to the prior actions where Baily was directly involved, and Baily was found to have substantially participated in the matter. Finally, Baily’s law firm was also disqualified as there was no showing it was screened from participation as required by Rule 1.12.

The Court of Appeal affirmed. Hassett had standing, despite the fact that he was not a party to the prior actions. It was not necessary to show that Baily possessed confidential information under Rule 1.12. Matter and case are not synonymous, as shown by comment 1 to Rule 1.12. Moreover, California Rule 1.7(e) provides a broad definition that is similar to ABA Model Rule 1.11, which governs the same principles for government lawyers discussed in ABA Model Rule 1.12, the basis for the California rule.

For purposes of this rule, “matter” includes any judicial or other proceeding, application, request for a ruling or other determination, contract, transaction, claim, controversy, investigation, charge, accusation, arrest, or other deliberation, decision, or action that is focused on the interests of specific persons,* or a discrete and identifiable class of persons

The Court of Appeal concluded that no abuse of discretion by the trial court had been shown.

Cases interpreting the new Rules of Professional Conduct are still rare and this well-reasoned opinion is a worthy addition to prior California cases that reached similar conclusions without the benefit of Rule 1.12

State Bar: Transparency for Thee But Not For Me

There is a lot of information on the State Bar of California website. But one thing you will not find. You won’t find decisions from the Hearing Department of the State Bar Court.

The State Bar Court page has a link to Hearing Department decisions. But you won’t find any after January 2019. That is, you won’t find recent ones. Instead, you will see this:

Hearing Department decisions are accessible from April 2014 through January 2019, at which point they vanish. If you want to see a Hearing Department decision after January 2019, you will have to know the specific case number or Respondent’s name.

Not coincidently, January 2019 was when the State Bar’s new case management system, aptly named Odyssey, came online. The same Odyssey implicated in the recent disclosure of confidential information now conceded to be the result of a flaw in the software provided by Tyler Technologies, the State Bar vendor, and not the result of some nefarious hack.

Long ago in the mists of history, longer even than the nine years Odysseus wandered on the wind dark ocean sea, the Association of Discipline Defense Counsel (ADDC) asked then Chief Trial Counsel James Towery (now Judge Towery) to provide copies of the Hearing Department decisions. The reason was to educate defense counsel about what was happening in State Bar Court to better advise their clients on what to expect in State Bar Court litigation and obtain knowledge that might lead to better trials and more settlements. Only about 50% of respondents are represented by counsel in the State Bar Court and not all of them by members of the ADDC. Only two institutions are privy to the complete picture of what goes on in the State Bar Court, the Court itself and the prosecutor, the Office of Chief Trial Counsel (OCTC). Discipline defense counsel are like the blind men in the parable: a trunk here, a leg there but no overall appreciation for what the elephant was. Judge Towery readily agreed.

Later on, in 2014, the State Bar Court began publishing links to a monthly list of decisions from the Hearing Department, a rather lazy solution compared to the full access the State Bar Court affords to decisions published and unpublished from the Review Department. But a better solution in terms of allowing access to the public at large access and understanding of the work of the Hearing Department. And, most importantly, a solution that allowed access to the entire corpus of that work, the cases where OCTC was successful as well as the cases where OCTC was not successful, either because the recommended discipline was less than that advocated by OCTC or because OCTC failed to prove any part of its case, resulting in a dismissal of charges.

Transparency and the public’s right to know have been trumpeted by the State Bar in advocating many policies, including posting the notices of disciplinary charges on the State Bar’s website before those charges are proven and the posting of the Consumer Alert badges in ever-expanding categories of cases, most recently, cases involving felony convictions.

These measures serve to protect the public, it is argued, by alerting consumers of legal services that the attorney that they might be thinking of hiring presents a potential danger. But it also serves the State Bar’s purpose to assure the public and the profession that it is zealously working to protect them. For the same reasons, attorneys who have been publicly disciplined are subject to publicity regarding their discipline, including inclusion in the Discipline Reports published in traditional legal newspapers and, more recently, postings on LinkedIn.

Discipline defense counsel know they do because we often achieve good results for our clients at trial, sometimes including complete dismissals. But the second purpose, the public relations purpose, isn’t served by disseminating information regarding OCTC’s failures. Finding information on the cases that OCTC loses, including how far they fell short and why is difficult.

But the overall picture is murky. The State Bar does publish statistics in the Annual Discipline Report but no detailed information as to why cases filed in State Bar Court are resolved with no action. For instance, the Annual Discipline Report for 2020 contains an entry for cases closed by the State Bar Court with no action, with an explanatory footnote stating that this could occur for many reasons, including “(1) respondent was disbarred in another matter; (2) respondent was ordered inactive pursuant to Business and Professions Code section 6007(b); (3) respondent’s death, shortly before or after dismissal; (4) respondent’s resignation; (5) dismissal by OCTC; and (6) dismissal by State Bar Court.”

As you can see, those numbers are not broken down by the types listed in the footnote.

Moreover, while complete dismissals are relatively few, there are no statistics on the much larger number of cases where OCTC sought a higher level of discipline than was ultimately decided on by the Court. This information can only be understood by an examination of the decisions themselves.

When Odyssey went live in January 2019, we were told that it would lead to greater transparency because it would allow the publication of the entire State Bar Court docket in each case online. This is true but misleading. More information is not necessarily better information, and without access to all Hearing Department decisions in one place, it is impossible for outsiders to fully analyze just how well OCTC is doing, measured by the yardstick of success in State Bar Court. Undoubtedly, OCTC closely analyzes each Hearing Department decision to determine whether to appeal it to the Review Department.

This information should be easily obtainable. Yet efforts by defense counsel to obtain these decisions have so far met with no success. And because State Bar Court no longer publishes even links to the decisions, they remain hidden from public view, accessible only in the dockets of individual cases. This is odd given that Review Department decisions are easily accessible. Whatever the explanation, this is incompatible with a government agency that has made transparency and the public’s right to know a central argument for publicizing its work.