Will Transparency Ghost Haunt Supreme Court?

Senate Bill 387, the dues bill which gives the State Bar the ability to collect the money it operates on, has been amended to subject to the State Bar to the Bagley-Keene Open Meeting Act and to the California Public Records Act.   Among other changes, Government Code section 6254 would be amended to read:  ” (1)  “State agency” means every state office, officer, department, division, bureau, board, and commission or other state line 31 body or agency, except those agencies provided for in Article IV  (except Section 20 thereof) or Article VI of the California Constitution. (2)  Notwithstanding paragraph (1) or any other law, “state lagency” shall also mean the State Bar of California, as described line 36 in Section 6001 of the Business and Professions Code.”  Emphasis added.

The State Bar is an agency provided for in Article VI of the California Constitution, but it is now literally definied as a “state agency” for the purposes of public disclosure under the California Public Records Act but the California Supreme Court, which is explicitly exempt from the CPRA, has described the State Bar as its “administrative arm” for discipline and admissions purposes.  Assuming these changes go forward, what must the State Bar disclose about the direction it receives from the Supreme Court in the discharge of its duties as the Court’s administrative arm?

Boo

Among the more intriguing allegations made in the Dunn Fiasco was the allegation that Senator Dunn misrepresented information from the Chief Justice regarding the Supreme Court’s position on moving the State Bar to Sacramento and, that Beth Jay, former principal attorney to the Chief Justice, played in a role in the decision by the Board of Trustees to fire Senator Dunn.  Beth Jay is a defendant in Senator Dunn’s lawsuit.

It is to be expected that the Supreme Court will give direction to its administrative arm.  But the extent of that direction, who gives it, who it is given to, and exactly how it is communicated has always been shrouded from public view.   In the 1990s that direction was minimal; there is the oft told tale of State Bar communications addressed to the Supreme Court that went unanswered for years, such as the recommendation of the Alarcon Commission in 1994 on permanent disbarment. Since the Supreme Court rode to the rescue in late 1998 by ordering a fee assessment on lawyers to revive the discipline system, it has played a much greater role.  We just don’t know how much greater.

Participation in public policy making is not what they want to do.  When Beth Jay was appointed as the Supreme Court’s liaison to the recent Committee that revised the Standards for Attorney Sanctions for Professional Misconduct (SASPM), she did not appear at the first two (public) meetings.  At the third meeting that she did attend, her most trenchant comment was that the revised SASPM not contain too many comments. Understandable that the Court would not want to help make policy that it might later be called upon to adjudicate on.  That is one of reasons for having the State Bar as an administrative arm in the first place.  But there must be some kind of communication and we don’t know what it is, with limited exceptions, the most notable being the Supreme Court’s extrordinary letter to another State Bar commission re-writing the Rules of Professional Conduct asking the Commission to look at a revised rule on prosecutorial misconduct

One of the significant reforms in the governance crisis was the appointment of attorney members to the Board of Trustees by the Supreme Court. These appointees appear to be becoming very powerful in State Bar policy making.  One of the first of these appointees, David Pasternak, was elected President of the State Bar in July 2015, defeating Heather Rosing, one of Trustees elected by the members of the State Bar.  It might not be surprising if the next incremental step in the ongoing Governance reform, which was on hiatus during the later part of the Dunn era, will be the elimination of elected attorney representatives.

Cal Supreme Court

The State Bar is a lonely planet orbiting two suns and dancing between the ebb and flow from the gravity from each one.  In recent years, the Supreme Court may have had the greater influence but the new opening meeting requirements may push the State Bar more firmly into the Legislature’s orbit.  In the meantime, we will get to see how much trust the latest incarnation of Transparency Ghost earns the ever-changing State Bar in the hearts of Sacramento.  And whether the Supreme Court’s fingerprints show up on the new more-transparent-than-ever State Bar.

Rotten From the Head Down

The new age of digital communication has opened up all kinds of possibilities.   Many of them involve questions of security and trust.  Not only does digital information often lacks the context that we have come to rely on in making judgments about reliability, but the nature and content (“user name”) of digital media itself can deceive the user into thinking that they are anonymous and their speech consequence free.  It seems all should have learned this by now but some Federal prosecutors in New Orleans did not.  As the Fifth Circuit put it:

First, the government argues that anonymity diminishes the cloak of authority that would otherwise surround the prosecutor’s pronouncements. Because the online community does not know that a prosecutor is speaking, it cannot be adversely influenced by his inflammatory opinions. Second, the extent of the publicity surrounding the anonymous comments is uncertain because no one knows how many people read online comments to the newspaper of record. Third, these comments amounted to no more than voices in a chorus of public opinion on the Danziger Bridge trial and were no more likely to exert an influence than those of any other chorister. These arguments are not insubstantial, but they are outweighed by the insidious nature of prosecutorial anonymity, the growing influence of online communications to mold public opinion in our society, and the danger of mob reactions.

Anonymity provokes irresponsibility in the speaker. A prosecutor may attempt to comment anonymously in a pending case, whether in a bar, on a talk radio show, or online. It is hard to cloak one’s experiences, however, and listeners can easily infer, as a number of readers within the New Orleans USAO evidently did, that someone with “insider knowledge” is making thecomments. The speaker thus trades on his air of self-importance and his special knowledge, while imparting a biased and dramatic flair to his anonymous commentary. 

At pages 33-34.  Perhaps, the most troubling aspect is not that a Federal criminal prosecutor was posting anonymous comments trading on inside information but that we still don’t know exactly how many were.   The Court found the government’s zeal to get the bottom of the matter somewhat lacking.  Which seems to be consistent with the “everybody’s doing it” spirit which seems to pervaded the US Attorney’s office in New Orleans from top to bottom.

rotting fish

Someone once said the organization is always more primitive than the individual.  Institutional ethics presents many intractable challenges because they shape the perceptions of the individuals who belong to the institution in ways that favor the institution.  “Circling the wagons” is an emotional response that cannot be unlearned, no matter how sophisticated the wagon drivers are.  Digital media are highly adept at reinforcing these same sorts of biases.   You may think that you are searching Google but Google (and all the rest) are really searching you.  To figure out how to cater to your biases, to elicit an emotional reaction, to get you to pull the trigger on some decision to part with something dear to you.  The Fifth Circuit’s warning about the danger of mob reactions is well taken, as a certain dentist might agree.   The prosecutor’s delusion that they were acting in the public interest is frightening:  they were actually juggling a form of dynamite whose explosive power we are only now starting to glimpse.

Legal ethics has traditionally focused on the indivdual.   Discipline is meted out to individual lawyers who violate rules largely written to guide individual, not insitutional behavior.  An insitutional failure of the type presented here just isn’t contemplated by the rules.   We have talked about discipline of law firms for many years, at least since Ted Schneyer’s 1991 Cornell law review article but only two United States jurisdictions, New York and New Jersey, have rules providing for law firm discipline.  The concept of “ethical infrastructure” remains largely an academic discusion.  When was the last time you saw a continuing education class devoted to creating a law firm’s ethical infrastructure?  We are still treating the profession as if we were all solo practitioners?

United States v. Bowen, et al., isn’t an outlier but a symptom of the biggest problem in legal ethics today:  complacency.

 

Lawyer Advertising Reform: Not Soaking In it Yet

The Association of Professional Responsibility Lawyers (APRL) has proposed to eliminate the current thicket of lawyer advertising rules with “a single rule that prohibits false and misleading communications about a lawyer or the lawyer’s services.”  (2015 report of the APRL Regulation of Lawyer Advertising Committee, at page 3.)   That remarkable fact is followed by one perhaps even more remarkable.  At a joint meeting with APRL’s institutional opposition, the National Organization of Bar Counsel (NOBC), held in Chicago on July 31, that proposal did not seem to stir serious opposition.

The legal profession has become so many specialities and sub-specialities that often seem to little to do with each other.    The lawyers who work in attorney discipline and regulation have similarly become specialized, with professional discipline prosecutors who often face up in the trenches with professional discipline defense counsel who specialize in this area and little else.  The prosecutors have their professional organization NOBC, whose roots go way back to the mid-1960’s, even before seminal Clark Commission Report in 1970.  That study with its trenchant criticism of the “slow, secretive” attorney discipline processes in almost all states, precipitated a wave of professional reform in the discipline machinery nationwide, including further professionalizing the ranks of discipline prosecutors.   APRL came along much later, when some lawyers who were professional discipline prosecutors made the logical transition to full time defense of respondent lawyers in those discipline proceedings.  Charles Kettlewell, the founder of APRL, had been a former discipline prosecutor active in the NOBC.  So the path from professional discipline prosecutor to professional discipline prosecutor is a well trod one, including many of the lawyers who defend discipline cases in California.

Their positions are analagous to criminal prosecutors and criminal defense lawyers. And just as in that world, there is often little love lost between discipline prosecutors and discipline defense counsel.   Discipline, like most litigation processes, is an adversarial process, something that is not always grasped by the public, or the public watchdogs.  The old collegial world of law practice where you could fight like caged animals in court during the day and go out for a drink together in the evening, to the extent it really existed, was washed away in the same wave of specialization that helped to create discipline specialists on both sides of the ball.   Yet, for the same reasons, a bond is created between you and your institutional adversary; after all, who else really has any insight into your world.   This is especially true in the relative small world of attorney discipline.

But agreement is rare and to the extent that there is agreement on changing the current structure of lawyer advertising, it is due to two things.  One, the meticulous process employed by the APRL Committee, including input by the NOBC and the ABA Center for Professional Responsibility .  Second, the glaring reality that the world that the created the filigreed systems of regulation embodied in California Rule of Professional Conduct 1-400 and our Business and Professional Code sections 6157  et seq.  just doesn’t exist anymore.

So glaring that even discipline prosecutors can see it.  One of most telling moments at the joint meeting between APRL and NOBC was when John Berry,  head of the Legal Division of The Florida Bar, stood and commented that the report deserved to be closely looked at in light of recent events.  The Florida Bar had been one of the most aggressive regulators on the issue of attorney advertising and Mr.  Berry might have been thinking of Rubinstein v. Florida Bar, the recent Federal Court decision striking down Florida advertising rules purporting to ban lawyers from citing past results in their advertising.   The same thing happened to New York rules in 2007.   And the Louisiana rules in 2011.  The Federal Courts, consistent with the robust First Amendment message being sent from on high, have said that Central Hudson really does mean what it says about compelling state interest.

The deeper reality is that the legal profession is following the lead of our consumer culture.   When it comes to advertising and solicitation, to paraphrase Madge, you are not just reading it, you are soaking in it.

I have read the average consumer is exposed to over 3,000 advertising messages a day.  Even if it that figure isn’t accurate, it certainly feels like 3,000 or more.  Moreover, it has become an accepted feature of our culture since the rise of digital social media, that all of now, more than ever, commoditizing ourselves, even in our social interactions.   It is hard to make earnest arguments for the dignity of the legal profession or whatever when an earnest Presidential candidate (and Harvard trained lawyer) is frying bacon with a automatic rifle to sell himself for the highest office in the land.  The legal profession fell off its pedestal some time ago in the public eye;  we are selling a commodity just like Palmolive dish soap or red meat Republicanism.

It has been a cliché for decades now that the only people who complain about lawyer advertising are other lawyers, and they still do, with little or no effect except to call the lawyer’s attention to some minor rule or standard that had escaped attention.   A favorite:  Rule 1-400, Standard 9, which purports to create a rebuttable presumption that the use of a “firm name, trade name, fictitious name, or other professional designation… which differs materially from any other such designation used by such member or law firm at the same time in the same community” is misleading.  I have tried to explain this provision to lawyers who want to brand particular types of services with different firm names without successs.  I tell them to imagine that the Rules of Professional Conduct were written for a small city of 75,000 people with 500 lawyers in 1974 and they begin to understand.

California is undertaking a project to revisit its Rules of Profession Conduct and it is to be hoped that the Commission takes a long look at the APRL report and recommends some major changes to our advertising rules.  But don’t get too hopeful.   Whatever changes that Commission might propose would not affect the “Larry Parker” statutes contained in the Business and Professions Code.   Those are not going away any time soon.

 

What Did You Do in the Loan Mod Wars, Daddy?

With the end of the Great Recession, the Loan Mod Wars of 2008-2013 are gradually fading from view.  The numbers of complaints to the State Bar of California have returned to pre-recession levels, even as the Client Security Fund still struggles to pay off a large number of “legacy” claims deriving from the bad old days when lawyers were, according to the official story,  running amuck ripping off desperate homeowners by the millions.  You might think that attorneys would have gotten the message a long time ago but a few are still being hoisted on the twin petards of SB 94 and  extra jurisdictional practice, some years after their transgressions.

It is ancient history how, but its worth recalling that SB 94, the 2009 law that kicked the off the Loan Mod Wars was bottomed on the idea that consumers did not need an expensive lawyer to deal with the banks, so that destroying the ability of lawyers to provide those services by banning advanced fees would work no hardship.   California Civil Code section 2944.6, enacted as part of SB 94 required attorneys entering into such engagements to tell clients exactly that:

   It is not necessary to pay a third party to arrange for a loan
modification or other form of forbearance from your mortgage lender
or servicer. You may call your lender directly to ask for a change in
your loan terms. Nonprofit housing counseling agencies also offer
these and other forms of borrower assistance free of charge. A list
of nonprofit housing counseling agencies approved by the United
States Department of Housing and Urban Development (HUD) is available
from your local HUD office or by visiting www.hud.gov.

But the New York Times tells us (“A Slack Lifeline for Drowning Homeowners“) that a recent report from the Office of the Special Inspector General for the Troubled Asset Relief Program (SIGTARP) on the Federal Government’s HAMP program tells a much different story.   At the program’s inception, it was estimated that HAMP would “enable as many as 3 to 4 million at-risk homeowners to modify the terms of their mortgage to avoid foreclosure.”   We, the taxpayers of the United States, agree to pay the mortgage servicers  $29.8 billion as an incentive to modify the loans of homeowners facing foreclosure (SIGTARP report, page 96.) “Although participation in HAMP is voluntary, servicers who agree to participate are required to offer HAMP modifications to all eligible homeowners. The actual execution of HAMP lies in large part with participating mortgage servicers, whose employees are responsible for reviewing homeowner HAMP applications and deciding whether a homeowner gets into HAMP or not.”

The results?  “According to Treasury’s official HAMP database, of the 5.7 million homeowners who applied for HAMP between December 2009 and April 2015, servicers turned down 4 million.  That means that, according to Treasury’s HAMP database, servicers turned down more than 7 out of every 10 homeowners (72%) who applied for HAMP.” (SIGTARP report, at page 100.)  But wait, that’s not all: “The problem may be far worse than that. In a separate survey, participating servicers report that they have denied far more than 4 million homeowners for HAMP. In those surveys, HAMP servicers report denying 5.8 million homeowners for the HAMP program, an additional 1.8 million not captured in the HAMP database during the height of the foreclosure crisis.”

“HAMP’s program guidelines require that servicers report to Treasury the reason the servicer denied each homeowner for HAMP by selecting one of the Treasury-defined denial reasons set out in the HAMP guidelines. The top three reasons servicers report for denying homeowners’ HAMP applications attribute the denial to the fault of the homeowner or to the homeowner falling outside of eligibility standards. These include denials because: the homeowner’s application was “incomplete;” the homeowner withdrew the HAMP application or “failed to accept” an offered HAMP trial; or the homeowner’s income fell outside of HAMP eligibility. While these denials may be appropriate in particular cases, the fact that servicers have reported the same reasons so frequently—in light of known problems at the largest HAMP servicers—raises concerns over whether Treasury is doing enough to ensure that denials of homeowner HAMP applications are accurate and based on the actual conduct and status of the homeowners, rather than on the misconduct of the mortgage servicers.”

foreclosure

As reported by SIGTARP, by the Consumer Finance Protection Bureau, by Treasury in its reviews of the top HAMP servicers, and by homeowners who have filed complaints with Treasury, there are many problems with servicers themselves that can affect each of these three denial reasons.  Persistent problems and errors in the application and income calculation process (servicers calculate a homeowner’s income) have historically plagued homeowners seeking HAMP assistance, and continue to do so.  As a result, eligible homeowners may have been, and may continue to be, denied a chance to get into HAMP through no fault of their own.

While these denials may be appropriate in particular cases, the fact that servicers have reported the same reasons so frequently—in light of known problems at the largest HAMP servicers—raises concerns over whether Treasury is doing enough to ensure that denials of homeowner HAMP applications are accurate and based on the actual conduct and status of the homeowners, rather than on the misconduct of the mortgage servicers….. Persistent problems and errors in the application and income calculation process (servicers calculate a homeowner’s income) have historically plagued homeowners seeking HAMP assistance, and continue to do so. As a result, eligible homeowners may have been, and may continue to be, denied a chance to get into HAMP through no fault of their own.

This is hardly news to we battle hardened veterans of the Loan Mod Wars, those of us who dealt with thousands of State Bar complaints against attorneys seeking to help distressed homeowners.  The Times’s Gretchen Morgenson details a few anecdotes that seem so familiar to us.  The loan servicers were happy to take that sweet TARP cash, but not so eager to follow through on relief for troubled homeowners.  The reason, as related by Jacob Inwald, director of foreclosure prevention at Legal Services NYC, seems pretty obvious: delaying a modification or even wrongfully denying it, means more interest and fees that can be charged to the borrower, increasing the amount of the mortgage.  As quoted in the Times story, Mr. Inwald states that obtaining a modification requires “constant pushback and challenging wrongful denials.”  In other words, a lawyer.

Some of the loan modification attorneys were involved in outright scams; some of them were victims of scammers themselves.  Others were actually achieving good results for their clients while trying to find a way to stay in business in the face of SB 94’s prohibition on upfront fees.  But the indiscriminate scythe of Civil Code section 2944.7, wielded by the State Bar with a special fury after the ascension of our Chief Trial Counsel in 2011, showed no mercy.

The Loan Mod Wars are fading to a close, not with a bang but with a wimper.    Some may deserve medals for their participation.  Others would really, really like to forget that the whole thing ever happened.

 

One Reporter’s Opinion, Part Two: A Sea Change is Needed

The Integrated State Bar Will Never Be Trusted on Discipline

The reaction to the State Auditor’s report points to the most serious problem: a lack of confidence in the discipline process because it is administered by an ostensibly self-governing profession. After more than thirty years of newspaper exposes, reorganizations, studies, task forces, consultants and occasional scandals, the public still does not have confidence in the discipline system.

The truth is that the disciplinary system never will be trusted as long the system is perceived as one run by lawyers, the current system we have now, the integrated State Bar, which, alone among professional regulators, combines elements of a trade association and a regulatory agency. This is true whether or not the system does a good job at protecting the public. It will never be seen as doing a good job, no matter how much the mechanisms are tinkered with.

The thread of distrust is woven into the history of the State Bar over the last thirty years and more. The Complainants Grievance Panel was created because the Legislature did not trust the State Bar not to dump complaints in the wake of the revelations published in the San Francisco Examiner in 1985 about the 4,000 complaint backlog. I argued as amicus to the Supreme Court in 1998 that a special master be appointed to assure that any special assessment ordered by the Supreme Court be spent only on discipline. One of the reasons a fee bill could not be passed in 1998 was that it had been was revealed that the State Bar had left employment positions in the OCTC unfilled in order to use the salary savings for non-disciplinary purposes. No one in the Legislature trusted the State Bar leadership. In 2010, the Legislature created a mechanism to reform the governance structure of the State Bar (SB 163) because it did not believe that the Board was placing public protection at the top of the State Bar’s agenda.

 

Trust street

Many more data points could be added to this history. The rather damning language appearing on the cover the State Auditor’s report is only the latest example of thread. Although the governance reforms have created some meaningful changes. The Business and Professions Code still speaks about “members” of the State Bar long past the time when it should be clear that the State Bar of California is not a bar association, but a government consumer protection agency.  Most California lawyers and the general public continue to believe that it is a bar association.  Many lawyers are under the apprehension that the State Bar is still their trade association. To the extent that it is, it cannot discharge that function consistent with the role as a government agency; in fact, California lawyers as a group do not have a consistent voice advocating their interests, as California physicians have in the California Medical Association.

Bold Action is Required to Invent the Future

California historian Kevin Starr has said that California is the place where the future is invented. The quote is apt for this subject because the future of lawyer regulation in California needs to be reinvented.

Our current “integrated bar” system, created in 1927, which relies on at least nominal self-regulation by lawyers is not working as well as it needs to work, either for public or for the legal profession. Moreover, the legal profession, as part of the justice system, is not able to deliver affordable access to justice.
Both of these problems are related to the deep history of the legal profession that has sometimes been referred to as the “guild” mentality, the traditional monopoly that lawyers have had to provide legal services. An interesting historical example of the guild can be found in the fact that the Daily Journal, a legal newspaper, published a scheduled of standard fees to be charged for services for several decades in the 20th century. Another example is that the disciplinary process of the State Bar was originally administered by local committees of practicing attorneys with review by the Board of Governors for more than four decades after the creation of the integrated State Bar of California.

 

guild 2

A number of factors are now in play that are opening up the guild.

These have reached their fullest expression in Great Britain, where our legal system originated, and in Australia. These include so-called Alternative Business Structures, which relax the traditional investment in law firms by non-lawyers and Active Management Systems, being pioneered in New South Wales, prophylactic regulation that assists lawyers in delivering legal services before problems arise. Here in the United States, the State of Washington has pioneered Limited License Legal Technicians, legal professionals that fill the gap between lawyers and paralegal. The experience of these jurisdictions offers guidance as to how California, the leading state in the United States, can lead again in reforming legal service regulation to better deliver justice.

Over 26 years of closely observing the State Bar, from the inside as well as the outside, has convinced me that incremental tinkering with system as its exists will not fix the fundamental problems with the State Bar as an institution. We have had 30 years of studies, task forces, reorganizations, reforms and scandals. There are many smart, good people working at the State Bar and yet there is a pervasive culture of dysfunction that stems directly from the nature of the integrated bar and the unique place that our integrated bar has in our political system.

 

An Immodest Proposal: The Legal Services Regulation Authority (LSRA)

The State Bar, as an agency within the judicial branch of government under the California Constitution, needs to be transformed into Legal Services Regulation Authority (LSRA), and entity that will license and credential all providers of legal services, lawyers, limited license legal technicians, paralegal, document providers and immigration consultants, and other legal service providers that might be authorized.

This agency should remain in the judicial branch, under the ultimate guidance of the California Supreme Court. The provision of legal services is ultimately about assuring justice, which makes this area of economic activity unique among the professions, which are mostly, and appropriately, regulated by the Executive Branch. The Judicial Branch should principally be in charge to avoid the confusion engendered by multiple stakeholders
It should unambiguously be a government agency and should not discharge any trade association functions. Attorneys would not be “members” as they are currently designated in the Business & Professions Code. The acting Executive Director has acknowledged that the use of the term “members” is an anachronism that is no longer apt after the enactment of the governance reform.

Creating the LRSA would mean major legislative changes as well as amending the California Constitution, as it was amended by initiative in 1962 to provide for the State Bar’s status as judicial branch agency. The scope of this endeavor is ambitious. But it is worth doing to bring this important component of our justice system into the 21st century and to expand the availability of legal services.

 

big wave 2

The most important point is that incremental change is not going to solve the problem. Just as we did in 1927, we need to work a sea change in way we regulate the legal professions. The integrated bar was a well-intentioned attempt to improve the quality of the legal profession and the quality of justice, and it may have worked reasonably well for the first forty years of its existence.  It has not worked well for many decades.

One Reporter’s Opinion, Part One: The State Auditor’s Report

The State Auditor’s Report

Much current discussion has resulted from the State Auditor’s report issued on June 15, 2015. It obviously raises a number of issues that should concern anyone who cares about the administration of justice in California. For the most part, its analysis and conclusions regarding the consistent and long term management failures by the State Bar are spot on.  But the State Auditor’s conclusion the State Bar endangered the public by settling discipline cases for less discipline than was necessary to protect the public must be taken with a very large grain of salt. Of course, this is the finding that is drawing the most press attention. The reason is the profound lack of trust in the State Bar’s discipline system, reflected in the fact that the auditor reached this conclusion without the tools or analysis to support it.

The State Auditor Does Not Have the Expertise to Determine the Adequacy of Discipline

While the State Auditor’s expertise in auditing and financial matters, is the without question, they are not knowledgeable on jurisprudence of attorney discipline. The California Supreme Court has held that the determination of the proper discipline in a given case rests on a balanced consideration of the unique factors in each case (In the Matter of Oheb (Review Dept. 2006) 4 Cal. State Bar Ct. Rptr. 92, citing Connor v. State Bar (1990) 50 Cal.3d 1047, 1059, Schneider v. State Bar (1987) 43 Cal.3d 784, 798.) The State Bar’s Standards for Attorney Sanctions for Professional Misconduct (SASPM), recently revised, are intended to bring a measure of consistency to the process but are not binding on the Supreme Court and prescribe broad ranges of discipline, subject to consideration of factors in mitigation and aggravation. Moreover, settlements in discipline matters are subject to the same types of pragmatic factors as settlements in any other context, such as the strength and availability of evidence.

Ultimately, the appropriate discipline is what the Supreme Court says it is. And while the Supreme Court did identify 27 cases that it returned for reconsideration, during the same time period it approved the recommended discipline in hundreds of others. Moreover, since the finality rules (Cal Rule of Ct 9.10) were approved, the Supreme Court has approved thousands of discipline recommendations, and rejected very few.

The statistics cited the auditor regarding the relative proportions of reprovals and disbarments are interesting but don’t prove the lack of public protection. Measuring public protection is difficult, so many tend to fall back on the intuitive ideas that harsher discipline equals more public protection. This isn’t like the criminal system where sentencing is larger dictated by statute; this isn’t like the civil litigation system where damages are typically measured in dollars. An analysis of whether the discipline system is protecting the public can only be made by individuals with an understanding of the complexities of disciplinary jurisprudence and the functioning of the discipline system.

 

george_putnam

Who is this guy?

A Short Relevant History

That the Office of Chief Trial Counsel (OCTC) has exercised flexibility in settlement policy to deal with case inventory is hardly new or confined to the 2011. After the State Bar shutdown in 1998, a rule was adopted creating an Early Neutral Evaluation Conference, essentially a pre-filing settlement conference in State Bar Court for the express purpose fo expediting settlement of the huge case backlog that had occurred under the shutdown. This was done at the direction of Justice Elwood Lui, acting as special master overseeing the expenditure the special assessment ordered by the Supreme Court (In Re Attorney Discipline System (1998) 19 Cal.4th 582).

In 1999-2001, I worked as a manager in OCTC, managing a unit of ten trial attorneys. The policy of the office in that time was to accept the hearing judge’s recommendation resulting from the ENEC to expedite settlement. Michael Nisperos, Chief Trial Counsel between 2001-2005, had a stated policy goal of bringing the settlement rate in State Bar Court closer to the settlement rate in civil or criminal court. During his tenure, Senator John Burton played a major role in setting direction for the State Bar (see Obrien v. Jones (2000) 23 Cal.4th 40; see also Bus. & Prof. Code section 6230.) Senator Burton’s influence and personal interest in the subject of attorneys impaired by substance abuse is also evident in the selection of Mr. Nisperos, a recovering drug addict, as Chief Trial Counsel in 2001.

Mr. Nisperos declined to apply for a second term as Chief Trial Counsel. Scott Drexel, his successor, moved in the other direction, especially following the Supreme Court’s decision In Re Silverton (2005) 36 Cal.4th 81, which criticized OCTC and the State Bar Court for pursuing inadequate discipline. Mr. Drexel’s policy was to interpret the SASPM rigidly, which made it difficult to settle filed disciplinary cases. This, along with other management failures, resulted in a growth in the backlog of discipline cases (see State Auditor’s report at page 22.) OCTC’s rigid interpretation of SASPM was ultimately rejected by the State Bar Court in a decision that the Supreme Court declined to take up on review, despite its decision in Silverton and its earlier remand of the same case for reconsideration (In the Matter of Van Sickle (Review Dept. 2006) 4 Cal. State Bar Ct. Rptr. 980; Chief Trial Counsel’s petition for review denied.)

Mr. Drexel’s bid for the second term as Chief Trial Counsel was rejected by the Board of Trustees in 2009. At the time, there was much speculation that Mr. Drexel did not a get a second term because he was too tough a prosecutor. While the reasons that Mr. Drexel was not reappointed have never been made public, they had nothing to do with his toughness as a prosecutor.

Mr. Dunn assumed his former post as Executive Director in late 2010. Although Bus. & Prof. Code section 6079.5(a) clearly removes the Executive Director from operational responsibility for OCTC, Mr. Dunn moved quickly to remove the senior management of the office and set his goal of zero backlog by the end of 2011. Mr. Dunn was widely perceived as the Legislature’s man in Sacramento, the “right man at the time” as former State Bar President William Hebert stated, a time when the State Bar was going through the reform in its governance process prompted by SB 163 (see Bus. & Prof. Code section 6001.1.) It was assumed that the zero backlog goal was the direction of the Legislature. At the time, most people connected with the discipline system thought that it was an unrealistic goal. The Chief Trial Counsel now says she held the view that this was an “arguably unrealistic goal” in late 2011;  it is not clear that she reported this to the Board, or resisted Mr. Dunn’s direction, consistent with her responsibilities under section 6079.5. While the Chief Trial Counsel appeared to be Mr. Dunn’s protege in 2011, they are now at odds in the litigation Mr. Dunn has filed.  There is nothing in the State Auditor’s report that supports Mr. Dunn’s allegations that the Chief Trial Counsel intentionally omitted cases from the backlog numbers.  The cases that were omitted were so-called “State Bar Investigations” that are inititated by the State Bar itself, not the product of a complaint to the State Bar, cases that don’t fit within the statutory definition of the “backlog” contained in Bus. & Prof. Code section 6094.5.

My view is that it was grandstanding by Mr. Dunn, meant to convey the impression that something dramatic was being done to fix the discipline system, which, by historical standards was no more broken than usual when he assumed his position. Unfortunately, Mr. Dunn’s appointment as Executive Director appears to have been motivated by a desire to kowtow to an important “stakeholder” just as Mr. Nisperos appointment as Chief Trial Counsel was in 2001.

An important point needs to be made here. Much of the confusion, inconsistency and management incompetence that the State Bar has exhibited for the last three decades is rooted in the idea that the State Bar as an institution is beholden to multiple “stakeholders”: the Supreme Court, the Legislature, the Governor, the lawyers of California. Trying to please multiple stakeholders means that you will please none of them. This idea needs to be discarded and replaced with the idea that there is only one stakeholder: the people of the California.

The State Auditor’s Criticism of the Lack of Workforce Standards and Written Procedures is Trenchant

As the State Auditor acknowledges, there is an interplay between staffing levels, case processing times and the level of discipline. It is possible to build a discipline system where every case is tried and none is settled; the effect is to move the case backlog to the State Bar Court, perhaps the most labor intensive part of the process. More State Bar Court judges and prosecutors can be hired.

The auditor’s criticism of the lack of workforce planning (pg. 35-36) is relevant here. One complicating factor may be the unionized nature of the State Bar’s work force. I was very active in the attorney bargaining unit of the State Bar’s unionized work force (Service Employees International Union, local 535) from 1989 to 1999, including serving as President of the attorney unit, union steward and brief service on the contract negotiating team in 1994. Workload standards were discussed by State Bar management during the 1992 and 1995 contract year negotiations and opposed by the union. To my knowledge, they were never enacted.

Also highly relevant is the State Auditor’s  criticism of the lack of written policies and procedures in OCTC (p. 39.) Bluntly, OCTC has never been interested in written policy and procedures because it has always been afraid that it might be held to them. Before the shutdown of the discipline system in 1998, much effort was put into a comprehensive prosecution manual by senior OCTC attorneys but the work was interrupted by the shutdown.  After the shutdown, the acting Chief Trial Counsel, the late Fran Bassios, was not interested in pursuing the project.

Part of the difficulty in adopting long term quality control mechanisms like workforce planning and comprehensive written policies and procedures has been the State Bar’s tendency to lurch from crisis to crisis over the last three decades, with senior management focused on dealing with the crisis de jour.

The structure of the Board of Trustees, with its limited annual meetings, and turnover from year to year, ensures that top level management and oversight is limited. The State Bar President typically sets the agenda; after his or her election in October, little happens until the Board planning meeting early in the next January. After April, Trustees are usually preoccupied with the election of the next State Bar president in July. There is a precious window of three or four months to accomplish anything meaningful.

Among the Trustees, there is typically little interest in the discipline system, although it is the main activity of the State Bar. Meetings of Trustees’ Regulation and Discipline Committee are typically the last meetings scheduled on a Board Committee day agenda and they start late, often with insufficient time to fully discuss the issues. When the State Bar holds its annual “discipline day” in the fall to introduce new Trustees to the workings of the discipline system, attendance is always light.

An Independent Audit and Review Unit Should Be Created

All of the State Auditor’s recommendations should be adopted.

The scope of one of the auditor’s recommendations, the creation of an Audit and Review Unit independent of OCTC, should be expanded. Such a unit, similar to the Complainants’ Grievance Panel that I worked for from 1989 to 1992, should not only evaluate requests for review from complainants who have had their cases closed but should also audit the performance of OCTC in matters that have gone forward to disciplinary prosecution. The existence of an independent watchdog would bolster confidence in the discipline system and help to answer the question of whether it is really protected the public.