ADDC Comment to State Bar “Consumer Alert” Proposal

September 10, 2013

Jeffrey Chappelle

Office of the Chief Trial Counsel

State Bar of California

1149 S. Hill St., 10th Floor

Los Angeles, CA 90015-2299

Re:  Comment to Board Item 2013-08

The Association of Discipline Defense Counsel (ADDC) submits the following comment on the proposed modification of the posting of a “Consumer Alerts” badge on the membership page of lawyers accused of misconduct, as set out in item 2013-08.

 The Association of Discipline Defense Counsel              

I am the President of ADDC, the bar association for lawyers who represent lawyers and others in disciplinary, admissions, and regulatory proceedings before the State Bar Court of California and the California Supreme Court.  Our members include former State Bar discipline prosecutors, former State Bar Court judges, and former members of the State Bar’s Standing Committee on Professional Responsibility and Conduct.   Collectively our members have hundreds of years of experience with the discipline system and the bar admission process.   I have practiced law for over 39 years, the last 18 of which I have specialized in attorney discipline defense.  From 1990-1995 I was a compensated Judge Pro Tem on the State Bar Court.

The Revised Consumer Alert Proposal

This proposal seeks modification of the State Bar’s existing policy to authorize the posting of a Consumer Alert: (1) where the NDC or petition for involuntary enrollment alleges any misappropriation of $25,000 or more (i.e. not limited to theft of client funds); (2) where the NDC or petition for involuntary enrollment alleges fifteen or more cases of professional misconduct (i.e. not limited to loan modification misconduct); and (3) where the State Bar has filed an application seeking Superior Court assumption of an attorney’s law practice, pursuant to Business and Professions Code section 6180 et. seq. or 6190 et. seq. The proposal further seeks authorization to keep the Consumer Alert on the member’s State Bar online profile page where the State Bar Court finds the member culpable of professional misconduct or grants the State Bar’s petition for involuntary inactive enrollment or where the Superior Court grants the State Bar’s application for court assumption of the member’s law practice.

The Consumer Alert Allows the Office of Chief Trial Counsel to Destroy an Attorney’s Practice without Having to Prove Disciplinary Charges

The economic impact on an attorney who has a Consumer Alert badge placed on his or her member page cannot be understated. It allows the State Bar to destroy an accused attorney’s practice without ever having to prove its case in State Bar Court.  Indeed, that is the rationale for it: to keep the accused attorney from acquiring new clients.  While filed discipline charges have always been accessible to the public, the internet has changed the way that many consumer clients choose counsel, just as it has changed the way everyone shops for goods and services:  more and more, those decisions are based on information acquired through the internet. While the Consumer Alert contains a disclaimer proclaiming that an accused attorney is presumed to be innocent of discipline charges, in practice that disclaimer will play no part in the consumer’s decision to hire counsel.  It is highly unlikely that any client who is aware of the Alert will employ that attorney.

It is established law that punishment is not a permissible aim of the discipline system.  A Consumer Alert issued on an attorney who is not a threat to the public is unduly punitive.  Any expansion of current policy must carefully define the circumstances where the Consumer Alert badge is posted.

For this reason that the Board of Trustees needs to be careful before expanding the current program.

The McHugh Case Illustrates the Potential Unfairness and Abuse of the Consumer Alert

The investigation and charging process of the Office of Chief Trial Counsel (OCTC) is not flawless.  This is illustrated by the recent Hearing Department decision In the Matter of McHugh (State Bar Court case no. 07-O-14334).[1]  Mr. McHugh was originally charged with 18 counts of misconduct in a single client matter; OCTC dismissed 5 counts before trial.  10 of the 13 remaining counts involved allegations of moral turpitude and the remaining three involved serious misconduct as well.   The Hearing Department’s decision after trial exonerated Mr. McHugh on a counts.  The hearing judge found with respect to almost all the counts that the evidence offered by the State Bar failed to prove any act of moral turpitude by Respondent, and that in many instances, the factual allegations were not supported by any evidence at trial whatsoever. Slip opinion at page 7.[2] 

Because he was exonerated at trial Mr. McHugh will be able to recover his out of pocket costs if the decision stands; he will not recover the substantial attorney’s fees that he paid his counsel for defense in State Bar Court (the Daily Journal in its article concerning this case reported McHugh’s attorney’s fees were $100,000).

It is the sense of ADDC and its membership that the McHugh decision is not an aberration, and that the pace of complete exonerations by the Hearing Department is increasing.  Only the Chief Trial Counsel would have precise number of cases that have resulted in complete or partial exoneration, or trends in that category, which information should be shared with this Committee to aid in its deliberations.

Mr. McHugh was subject to the Consumer Alert badge, although the disciplinary charges did not involve either loan modification misconduct or any allegation that he misappropriated more than $25,000.  It was placed on his Membership Records in apparent violation of the current policies adopted by the Board.  It has now been removed.  It is not clear whether the posting of the badge was intentionally done in violation of policy or through the negligence of OCTC in not understanding the parameters of the policy.

The Revised Proposed Policy Regarding Posting the Consumer Alert Badge after Any Culpability is Found is Unfair

The original proposal from the Chief Trial Counsel would have required the badge in every instance where a notice of disciplinary charges or 6007 petition was filed, regardless of the specifics of the alleged misconduct.  The proposal was withdraw after the May 9 meeting of the RAD Committee.[3] The proposal has now been modified to address the apparent unfairness of that original proposal to “badge” every attorney as a threat to the public regardless of the nature of the alleged misconduct by imposing a threshold where it is presumed the attorney is a threat to the public, i.e., where there are fifteen cases filed against the attorney.  It is our opinion there needs to be a clarification as to whether the fifteen case threshold refers to fifteen different counts, or to charges relating to fifteen distinct clients.  If fifteen cases means fifteen counts and not fifteen separate complainants, the threshold is subject to abuse by overzealous or repetitive pleading.

The revised proposed policy with respect to partial exonerations contains the same fundamental unfairness.  Regardless of the specifics of culpability or any mitigating circumstances,, or whether culpability was established by trial or by stipulation, or the level of discipline, every attorney found culpable of any misconduct would be subject to the “Consumer Alert.”

The use of term “Consumer Alert” can only mean that the attorney is a threat to the public.  But the purposes of discipline as set forth in Standard 1.3[4] include more than public protection; they also include protection of the courts and the legal profession; the maintenance of high professional standards by attorneys; and the preservation of public confidence in the legal profession. Rehabilitation of a member can also be a permissible objective of discipline. 

The fundamental unfairness of this portion of the proposal is manifest:  if the Consumer Alert is based on fifteen separate client matters, and the attorney is found culpable of one act of misconduct, no matter how insignificant it might be, the Consumer Alert would remain on the member page, even if the actual discipline was a public reproval.  Similarly, if an attorney was alleged to have misappropriated $25,000 and it turns out that all funds are properly accounted for and some far lesser misconduct is established (e.g., failure to promptly refund the unearned portion of a fee), the Consumer Alert remains.

Given the potential unfairness to attorneys found culpable of minor misconduct, the revised proposed policy needs further revision to establish appropriate thresholds for imposition of the Consumer Alert badge only where the factual basis of the discipline, inactive enrollment or assumption of jurisdiction demonstrates a threat to the public.

The Consumer Alert Should Be Removed on Completion of Reproval Conditions, Probation, or Return to Active Status

One of the permissive purposes of discipline is the rehabilitation of the attorney where it is not inconsistent with the other purposes of discipline (Standard 1.3.)  Rehabilitation has long been a purpose of the discipline system.  Attorneys are typically placed on disciplinary probation which serves both the public protection and rehabilitation goals of the discipline system.

The revised proposed policy should be amended to provide that the Consumer Alert badge should be removed when the disciplined attorney successfully completes his or her disciplinary reproval conditions, probation or resumes active status.  To maintain an alert on the page of a member who has been otherwise found to have completed  his or her probationary or reproval term successfully by the State Bar’s Office of Probation (and therefore, presumptively also by the Supreme Court or State Bar Court) would be punitive in nature while not furthering any substantial public protection goal inasmuch as the member has otherwise been determined to be fit to practice.


The revision of the proposed policy to impose a fifteen case threshold for imposition of the Consumer Alert on filing is an appropriate first step to protect the public as well as ameliorate potential unfairness to respondents.

The revised policy needs further revision to set appropriate thresholds for imposition of the Consumer Alert where the misconduct does not demonstrate a threat of harm to the public.

The revised policy needs further revision to provide that the Consumer Alert badge is removed on completion of reproval conditions, probation or return to active enrollment.      



President, Association of

Discipline Defense Counsel



[2] The State Bar has appealed this decision to the Review Department.

[3]  The prior proposal did not provide for any public comment.  It merely asked the RAD Committee to recommend to the Board of Trustees to adopt the proposed policy.

[4]  Standard 1.3, Standards for Attorney Sanctions for Professional Misconduct, Title IV, Rules of Procedure of the State Bar of California.

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