Pyrrhic Victories: Exoneration in State Bar Court

Complete exoneration of all disciplinary charges in State Bar Court used to be a rare thing.  While it still isn’t common, the anecdotal evidence is that it is becoming more common.  The person who can really tell us, the Chief Trial Counsel, doesn’t publish those statistics.

The most compelling evidence is brace of non-published opinions from the Review Department, In the Matter of Robinson (filed September 19, 2013) and In the Matter of Johnson (filed October 11, 2013.)  In both these cases, the Review Department found no culpability.

Robinson presents a compelling picture of prosecutorial over-reach.  The sole issue on appeal was whether Mr. Robinson was culpable of failing to co-operate in the discipline investigation against him; the Office of Chief Trial Counsel (OCTC) chose not to appeal the dismissal of the other three charges ((1) failing to perform competently, Rule Prof. conduct 3-110(A); (2) failing to return unearned fees, Rule Prof. Conduct 3-700(D) and (3) failure to communicate, Bus. & Prof. Code section 6068(m).)  The hearing judge also found Mr. Robinson not culpable of the failure to cooperate charge, because Robinson, had, in fact, cooperated.  He just did not do as fast as the State Bar wanted.

The whole timeline of the Robinson prosecution is worth examining.  OCTC originally wrote to him on February 6, 2012; Robinson spoke to her at the end of February but did not respond in writing.  The investigator wrote to him again on March 6, asking for response by March 26, 2012.  When no response was received, the discipline prosecutor apparently gave Mr. Robinson notice that the State Bar intended to file discipline charges against him because Mr. Robinson requested a pre-filing Early Neutral Evaluation Conference (ENEC) on April 27, 2012 (State Bar Rule Proc. 5.30.)  On May 8, 2012, two days prior to the ENEC, he filed a comprehensive written response supported by documents.

Despite this, discipline charges were filed on May 15, 2012. just 99 days after the investigator initially contacted the respondent.  All charges were dismissed by the hearing judge.

Johnson involved a 40 year veteran attorney who was the trustee of his mother’s trust for several years.  Although he made mistakes in the course of serving as trustee, those mistakes did not harm the estate and did not involve dishonesty.  Johnson was accused of violating several probate code sections in the handling of trust, which violations OCTC contented amount to Mr. Johnson’s failure to uphold the law.  He was also accused of revealing a witness’s name in court in a criminal matter, alleged to be a violation of Penal Code section 1054.2, which was also alleged to violate Mr. Johnson’s duty to uphold the law under section 6068(a).  Unlike, Robinson, Johnson was found culpable at trial in Hearing Department.

Johnson illustrates a different kind of OCTC over-reaching;  a misunderstanding of the duty to support the law that is codified in Business and Professions Code section 6068(a).  “We have held that an attorney’s good faith mistake, even when it results in a violation of law, may be a defense to discipline under Business and Professions Code, section 6068, subdivision (a).”  And so it was here.  The Review Department found that it didn’t even need to get in the weeds of interpreting section 1054.2.

Other cases support the trend toward more exonerations.  In the Matter of McHugh was a case that garnered headlines when the Hearing Department issued its scathing decision dismissing all charges on July 1, 2013: “The evidence offered by the State Bar in support…fails to prove any act of moral turpitude by Respondent. In many instances, the factual allegations are not supported by any evidence at trial whatsoever.”  The State Bar has charged Mr. McHugh with multiple acts of moral turpitude and charging an illegal and unconscionable fee.  One of the legal contentions of the Deputy Trial Counsel was that a fee that is not designated as “refundable”  in the retainer agreement should be presumed to be “non-refundable.”  The Court was underwhelmed by the State Bar’s response:

In its response to the above directive and issues, the State Bar was unable to identify any statute or case law to support either contention. Instead, with regard to its contention that a retainer is non-refundable in the absence of contrary language, it cited and quoted from cases holding that, unless an advance fee “is actually a true‟ retainer, any unearned portion thereof must be returned to the client upon termination of the attorney‟s services. In this court‟s view, that rule of law defeats the State Bar‟s contention, rather than supports it.”

Despite the Hearing Judge’s long exposition of why State Bar’s’ case was just wrong, factually as well as legally, the State Bar has requested review in the McHugh case.

From the respondent in State Bar Court’s point of view, nearly as “good” as an exoneration in State Bar Court is an admonition (State Bar Rule Proc. 5.126.)  An admonition is not discipline but a warning from the court that you committed a minor violation and don’t let it happen again;  the rules allow an admonition to be re-opened if the respondent is brought up on discipline charges in a different matter within two years.   A recent high profile case in State Bar Court, the prosecution of unsuccessful judicial election candidate Clinton Parish, recently resulted in an admonition based on Parish’s violation of Rule Proc. Conduct 1-700(A).

Like McHugh, this one is going up to the Review Department.  Which probably isn’t good news for Mr. Parish.  A majority of the cases appealed to the Review Department in recent years have resulted in greater discipline after de novo review by the Review Department.  That is part of why Robinson and Johnson are so striking.  The appellate department of State Bar Court has not shown itself particularly sympathetic to respondents in recent years (although they exonerated a respondent in 2011 (In the Matter of Eytan, after a particularly pointless prosecution ably defended by my colleague Jonathan Arons.)

Good is in quotations marks above for a “good” reason.   Exoneration in State Bar Court is exciting for the respondent’s counsel but pretty much bad news for everyone else, who wasted the time and resources trying a case that should never have been tried in the first place.   That’s includes the respondent, the State Bar Court, the Office of Chief Trial Counsel and its institutional client, The State Bar of California.

The most obvious explanation for an increase in exonerations lies in two factors:

(1) the demands placed on the system the speeding up of the discipline process to accomplish the same amount of work in roughly half the time,

In 2010, the median length of time taken to complete a complaint investigation leading to a prosecution was 234 days. In 2011, this was reduced slightly, to 212. In 2012, this figure was cut by an additional 40%, to 129 days.

The median length of time between the completion of an investigation and the filing of a Notice of Disciplinary Charges was 206 days in 2010. This was reduced in 2011 to 160 days. In 2012, this period was further reduced by more than 60% to just 58 days.

The median length of time between the completion of an investigation and the filing of a Stipulation to Discipline (i.e. a ―plea agreement‖) fell precipitously, from 337 in 2010 to 82 in 2011, and further to 72 in 2012.

The median total time from the receipt of a complaint to the filing of either a Notice of Disciplinary Charges or a Stipulation to Discipline stood at 414 days in 2010 and 392 days in 2011. In 2012, this fell by 40%, to 235 days.

State Bar 2013 Annual Discipline Report at page 2.

 and the (2) “zero/ zero goal”

Returning to the State Bar in this capacity gives me the opportunity to establish a zero/zero goal — that is getting the State Bar’s backlog down to zero and assuring that there is zero tolerance for attorney misconduct in California.”

State Bar Journal,  September 2011, Ex Bar Prosecutor Kim Named Chief Trial Counsel 

The story is told of veteran NASA engineer who was told of former administrator’s Dan Goldin’s “better, cheaper, faster” program.  “In the real world, you can have any two of those three,” he replied.  At this point, it looks like the State Bar’s prosecution office is doing no better than one out of three.  Overworked people make mistakes;  a policy that every violation should be punished makes sure the bias will be toward prosecution, not closure.

The politics of discipline underlie the current public protection zealotry.  The idea that the State Bar discipline was too lenient drove the governance reform demanded by the Legislature and the resulting purge of senior management in the Office of Chief Trial Counsel.   But public protection isn’t served when weak cases are prosecuted; it’s diminished because that time and energy could be used on cases that present real public protection issues.

Those prosecutions are also unfair to the respondent attorneys involved. A rule allowing exonerated respondents to recover both out of pocket costs and their attorney fees would go a long way toward making sure only meritorious cases are prosecute.  Of course, at the new State Bar, anything that would appear to benefit the respondent attorney is politically incorrect. For example, the use of nolo contendere pleas, a procedure allowed by statute and rule for express purpose of encouraging settlements in case with civil liability issues, has been forbidden by fiat of the Chief Trial Counsel.  So we can expect that the trend toward more exonerations in State Bar Court will continue.

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