No Rest for the Wicked: Discipline Rules of Limitation

Statutes of limitation are a familiar concept for both lawyers and regular people. Sometimes referred to as statutes of repose, these are rules that impose time limits on the filing of an action in court, for instance, California Code of Civil Procedure section 340, which provides for two year period from the time of injury for filing an action. Lawyers, especially lawyers who deal with the law of lawyering, know that these statutes can be complex to apply, as shown by the statute of limitation for legal malpractice, section 340.6, which has spawned hundreds of judicial opinions interpreting it (476 at last count, according to Westlaw.) The reasons for statutes of repose are several as articulated by Aaron Larson:

Fairness: Legislators recognize that after the passage of a certain amount of time it can become difficult to defend against a lawsuit, due to fading memories, unavailable witnesses, the loss of evidence, and similar factors.

Judicial Efficiency: Both statutes of limitation and statutes of repose reduce the number of cases that are filed in court, and dispose of an additional subset of claims without the need for complicated hearings or trials.

Finality: For certain types of claim, such as claims against an estate, it makes sense to provide for a final date after which no further claims can be made. If there were no cut-off date for claims against an estate it would become difficult for a court to approve a final settlement and distribution of its assets, and heirs would be at risk of being ordered to return part or all of their inheritances to the estate in order to cover its liability for a late claim.

Attorney discipline is a type of specialized litigation in every state but very few states have a statute or rule of repose in the discipline arena. California does, modeled after its complex cousin, CCP section 340.6, and contained in State Bar Rule of Procedure 5.21(reproduced below).

The provenance of the Rule of limitation lies in one of the innumerable studies of the discipline system that have occurred over the last four decades. This is one that actually had some impact. In 1993, State Bar President Margaret Morrow created a commission to evaluate the extensive reforms enacted in the late 1980s under the leadership of State Senator Robert Presley and Robert Fellmeth, of the Center for Public Interest Law (CPIL) at the University of San Diego School of Law. The Commission was chaired by Justice Arthur Alarcon and known as the Alarcon Commission. The Alarcon Commission interviewed numerous individuals involved in the California discipline system (including me) and made a number of recommendations for changes, including the creation of a five-year rule of limitation on the filing of formal discipline charges. At the time, an oft-quoted observation was that only murder and attorney discipline did not have some rule or statute of repose.

Like most rules, the text reflects a number of limitations on the limitation. Primarily, the Rule only applies to a disciplinary proceeding based “solely” on a complainant’s allegations. All the other possible ways a discipline proceeding can come about, via a criminal conviction (Bus. & Prof. Code section 6101), via a reportable action (Bus. & Prof. Code section 6068(o) or section 6086.1), via an investigation initiated by the Office of Chief Trial Counsel (OCTC) (SBI), none of these trigger the five year period of limitation. The clock just keeps running. In one notable case, the Office of Chief Trial Counsel initiated a disciplinary proceeding in 2017 based on a Federal judge’s findings in a habeas proceeding of protection misconduct that occurred in 1984.

Second, the Rule contains many tolling provisions, some similar to the statute of limitations governing legal malpractice. Code Civ. Proc. section 340.6. It is tolled while the lawyer continues to represent the client. It is tolled while parallel proceedings occur in civil, criminal, or administrative tribunals. It is tolled if the attorney conceals facts about the violation until the State Bar or the victim discovers the true facts. The tolling provisions eat most of the rule.

Third, the Rule of Limitations does not apply to “continuing offense”, in which case in does not begin to run until “the offensive conduct ends.” In the Matter of Saxon (Review Dept. 2020) 5 Cal. State Bar Ct. Rptr. ___, slip opinion filed 6/26/20, 2020 WL 3485821) involved a lawyer who did not represent the victim as a lawyer but who was involved in a fiduciary relationship that required him to hold funds in trust as part of a motion picture deal. The hearing judge dismissed the proceeding under Rule 5.21. The Review Department revived it on appeal by construing (although “contorting” may be more accurate) “representation” to include the fiduciary duty of holding funds in trust outside of legal representation:

Based on the facts as alleged, we find that Saxon was acting as a fiduciary by holding funds in escrow, having been given precise instructions by the Financing Agreement. He remained in the capacity of a fiduciary with an obligation to hold the escrowed funds “in trust” until the Fandango production was completed and the purpose of the escrow fulfilled. As such, contrary to Saxon’s argument, the extension of the period of limitations was not endless—it ended when its purpose ended, and its purpose was the production. The [amended notice of discipline charges] states that the film was released in 2014, which would indicate that Saxon’s escrow responsibilities would be terminated at that time.

Saxon, slip opinion filed 6/26/20, at page 7.

Between the complainant limitation, the tolling provisions, and the continuing violation doctrine, there are few cases the Office of Chief Trial Counsel cannot prosecute, no matter how old. Yet, occasionally, motions to dismiss based on Rule 5.21 are sometimes granted. Therefore, OCTC has proposed additional reform of Rule 5.21, intended to ensure that there is truly no rest for the wicked. The proposed “reforms” would, among other things enshrine the Saxon rule, extend the time for filing by another two years if the investigation was subject to review by the Office of General Counsel and gut the complainant limitation by providing that even such a proceeding is not barred from prosecution if OCTC receives information from an independent source, even if that independent source was brought to OCTC’s attention by the complainant.

As an example, the OCTC has received complaints against prosecutors submitted by academic researchers premised on their review of public source materials including newspaper reports and judicial opinions. The OCTC believes that disciplinary proceedings arising from complaints of this type should be treated as independent source proceedings given that the complainant is simply a conduit for identifying independent source information, but the rule is unclear. Accordingly, proposed amendments: (1) provide examples of what constitutes independent source information, including court orders or opinions, a judge’s report, or a media report; and (2) make clear that the independent source exception applies regardless of how the State Bar learns of independent source information, even if the State Bar is notified of the information by a complainant. 

This is the scenario discussed in a prior post The SBI Mystery and it refers to complaints filed against Trump legal strategist John Eastman.  The implications of this statement are incredible. OCTC is saying that even with information from public sources, it may take them more than five years to investigate and make a decision as to whether to pursue formal discipline charges.

Public protection zealots sometimes ask why the discipline process is so slow, especially as the numbers of cases in the once-dreaded backlog have grown. Part of the answer now seems to lie in Parkinson’s law, the familiar adage that work expands to fill the time allotted. This was the original impetus for the widely reviled backlog statute, section 6094.5, originally enacted after the backlog scandal of the mid-1980s. As a result of recent growth of the backlog, this section was recently amended to require the State Bar to propose case processing standards no later than October 31, 2022 “for competently, accurately, and timely resolving cases within the Office of Chief Trial Counsel” …. “that reflect the goal of resolving attorney discipline cases in a timely, effective, and efficient manner while having small backlogs of attorney discipline cases and best protecting the public.” The amended legislation is careful to say that nothing in these standards creates a jurisdictional bar in any particular case.

An informal survey revealed that most states’ discipline systems do not have any rule of limitation. The text of Rule 5.21 reflects the inherent confusion about the nature to attorney discipline: does it exist to address the attorney’s fitness to practice or does it exist to vindicate a righteous grievance by a victim of misconduct. The Legislature has often seemed to tack in the second direction, with legislation giving complainants various rights in the discipline system (see sections 6092.5 and 6093.5.) If a Rule were truly to be written addressing fairness, judicial efficiency, and finality, it would be something much different than current Rule 5.21, perhaps a three-year period of limitation from the time the State Bar learns of the facts constituting the misconduct, with appropriate tolling provisions. But that isn’t going to happen.

Rule 5.21, Rules of Procedure of the State Bar of California

(A) Time Limit for Complaint. If a disciplinary proceeding is based solely on a complainant’s allegations of a violation of the State Bar Act or Rules of Professional Conduct, the proceeding must begin within five years from the date of the violation.

(B) When Violation Occurs. The State Bar Act or a Rule of Professional Conduct is violated when every element of a violation has occurred. But if the violation is a continuing offense, the violation occurs when the offensive conduct ends.

(C) Tolling. The five-year limit is tolled:

(1) while the attorney represents the complainant, the complainant’s family member, or the complainant’s business or employer;

(2) while the complainant is a minor, insane, or physically or mentally incapacitated;

(3) while civil, criminal, or administrative investigations or proceedings based on the same acts or circumstances as the violation are pending with any governmental agency, court, or tribunal;

(4) from the time the attorney conceals facts about the violation until the State Bar or the victim discovers the true facts;

(5) from the time the attorney fails to cooperate with an investigation of the violation until the attorney provides substantial cooperation;

(6) from the time the attorney makes false or misleading statements to the State Bar concerning the violation until the State Bar discovers the true facts;

(7) while the disciplinary investigation or proceeding is abated under rule 5.50;

(8) while the attorney is participating in an Alternative Dispute Resolution Mediation Discipline program, Agreement in Lieu of Discipline Prosecution program, or other authorized diversion program;

(9) while the investigation is ended by admonition; or

(10) while the complaint or investigation is pending before the Office of General Counsel Complaint Review Unit; or

(11) while the attorney is on inactive status pursuant to Business and Professions Code section 6007, subdivision (a) or (b).

(D) Authorized Diversion Program. If the attorney successfully completes an Alternative Dispute Resolution Mediation Discipline program, Agreement in Lieu of Discipline Prosecution program, or other authorized diversion program, the underlying allegations are barred.

(E) Office of General Counsel Complaint Review Unit. The State Bar must begin disciplinary proceedings within two years after proceedings before the Complaint Review Unit concludes.

(F) Death of Complainant. If a prospective complainant dies before the time to begin a disciplinary procedure expires, a surviving family member or the estate’s executor or administrator may file a complaint with the State Bar within two years after the complainant’s death.

(G) Independent Source. The five-year limit does not apply to disciplinary proceedings that were investigated and initiated by the State Bar based on information received from an independent source other than a complainant.

(H) Waiver. The attorney and State Bar may agree in writing to waive or extend the limitations in this rule.

(I) Reinstatement Proceedings. This rule does not apply to reinstatement proceedings

Leave a Reply

Please log in using one of these methods to post your comment: Logo

You are commenting using your account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s