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.

The California Supreme Court has taken the unusual step of rejecting a recommendation from the State Bar Court and imposing its own discipline (disbarment) (In the Matter of Duane Tucker.)  The case has an eventful  history.  In October 2011 Tucker and the Office of Chief Trial Counsel (OCTC) stipulated to a six month actual suspension, despite Tucker’s two prior disciplines.  In June 2012, the Supreme Court remanded the case back to State Bar Court along with a number of other stipulated decisions.  The matter was tried.  After trial, the Hearing Judge recommended two years actual suspension in decision dated January 11, 2013.  Shortly after, Mr. Tucker submitted his resignation with charges pending.  On August 21, 2013, the Supreme Court rejected the resignation, rejected the two year actual suspension recommended by the State Bar Court and disbarred Mr. Tucker.

It’s bedrock law in California’s attorney discipline jurisprudence that the California Supreme Court has “reserved, primary and inherent, power” to discipline  a lawyer limited only by reasonable legislative action that does not materially impair it (Obrien v. Jones (2000) 23 Cal.4th 40, 48.)  The Legislature expressly recognized this power in Bus. & Prof. Code section 6100 (“Nothing in this article limits the inherent power of the Supreme Court to discipline, including to summarily disbar, any attorney.”)  During and shortly after the overhaul of the State Bar discipline system in the late 1980’s, the Supreme Court seemed to step back from active involvement in the discipline system, especially after the “finality rules” were added the California Rules of Court in 1992, rules delegating certain powers to the newly created full time professional State Bar Court (Rule 9.10, et seq.)  The Supreme Court got out of the business of routinely writing decisions in attorney discipline proceedings and a few years later decided that they didn’t have to (In Re Rose On Discipline (2000) 22 Cal.4th 430.)

After the finality rules were adopted, Supreme Court decisions in disciplinary matters issued is spurts every five years or so: In the Matter of Morse (1995) 11 Cal.4th 184, In Re Brown (1995) 12 Cal.4th 205, Rose (supra), In Re Paguirigan (2001) 25 Cal.4th 1 and its companion case, In Re Lesansky (2001) 25 Cal.4th 11 and In the Matter of Silverton (2005) 36 Cal.4th 81.

Aside from these, the Supreme Court was almost entirely silent on discipline.  State Bar officials sought guidance on a number of issues, including recommendations from the Discipline Evaluation Committee issued in 1994 and were met with years of silence, or no response at all.  Even when the discipline system was shut down in June 1998 as a result of Governor Wilson’s veto the Supreme Court delayed acting for months, deferring to the Legislature, until finally riding the rescue with a special assessment at the end of 1998 (In re Attorney Discipline System (1998) 19 Cal.4th 582,)

Seemingly true to this loose schedule, the Supreme Court accepted a petition for review from the Office of Chief Trial in the Matter of Gary Grant in 2011.  That matter is still pending in the high court.  But the Supreme Court silence on discipline began to break earlier.  In the aftermath of the shutdown crisis, State Bar officials understood that they needed to move closer to the Supreme Court.  Proposals that might have been structured as State Bar Rules of Procedures in the 1990’s were instead re-cast as proposed California Rules of Court requiring Court approval.  This process accelerated in the post-Silverton era.  A new rule on resignation was adopted in 2007 requiring State Bar Court review, after the Supreme Court made its unhappiness with the the existing rule requiring Board action known.  In 2008, the Supreme Court disapproved such a proposal on permanent disbarment in a behind the scenes dialog with the State Bar.

In early 2010, the Supreme Court sent a shock to the discipline system by rejecting en masse approximately 30 resignations with charging pending.  Resignation with charges pending had played an important role in reducing the discipline system workload;  following this action, resignations were reduced to trickle, replaced by a previously unknown and more labor intensive mechanism, stipulation to disbarment.

A second shock ensued in 2012 when the Supreme Court returned 42 disciplinary stipulations “for further consideration in light of applicable discipline standards.”  Aside from taking some of the luster off new Chief Trial Counsel Jayne Kim’s reduction of the case backlog, this second shock dramatically increased the workload of the State Bar Court.  Historically about 15% of discipline cases were tried; now that has gone up to something over 30%. At the same time, the State Bar Court is reeling under the impact of rule changes enacted in 2011 that require discipline cases to be tried within 125 days of the filing of charges; the previously guideline was 8 months.  Presiding Judge Remke of the State Bar Court reported on the positive impact of these rule changes to the Regulation, Discipline and Admissions Oversight Committee (RADO) in July 2013 but warned that the decline in settlement rates threatens to reverse those gains.

Now the third shock of the Supreme Court’s action in Tucker, reportedly, a subject of much discussion at the regular meeting of State Bar Court judges.  Clearly, settlement rates are not going to increase any time soon;  moreover, the levels of discipline recommended after trial in State Bar Court will certainly go up as the latest message from the Supreme Court is taken to mean more than Mr. Tucker’s fate as a lawyer.

The discipline system is evolving into a system where many if not most cases will end up being tried.  It’s hard to see how the current constituted State Bar Court is going to keep up without a significant investment of resources, new judges and new staff.  But the California Supreme Court is the boss, even if the direction the boss wants to move in isn’t explicit.  Will the Legislature increase the dues assessment to pay for this direction? If not, perhaps the Supreme Court will utilize the power it acknowledged in Attorney Discipline System to pay for the discipline system it wants.  Now that’s being in charge.

At the conclusion of Episode 2 (Mark of Cain, Continued), the State Bar’s Chief Trial Counsel had asked the Regulation, Admissions and Discipline Oversight Committee (RADO) to approve an expansion of the “Consumer Alerts” policy to place a prominent badge proclaiming the lawyer to be a threat on the lawyer’s web page on the State Bar website when any notice of discipline charges is filed alleging any misconduct.  As Draconian as that policy clearly would be, the most alarming part might have been that the Chief asked for the sweeping policy change without asking RADO to put the proposal out for public comment.

In a State Bar rocked by allegations that it operates in something far less than a transparent matter, the kindling was set for a firestorm of critical e-mails to Chair and members of RADO, once discipline defense counsel spread the word through email and listservs.  It was conceded at the RADO meeting in May 913 that public comment was necessary and the Office of Chief Trial Counsel indicated that a revised proposal would be submitted in July 2013.

And so it has.  You can read all 14 pages of its dense prose here.

Transparency is evidently not the same as clarity because it took a few passes to figure out the proposed new policy.  It boils down to this:  you will badged with the Mark of Cain if you are accused of misconduct in at least 15 “cases” in State Bar Court, whether by notice of discipline charges or 6007(c) petition, or if the State Bar files a petition in Superior Court to assume jurisdiction over your practice.  15 “cases” is not defined but in State Bar usage is usually means 15 separate investigation case numbers, usually representing 15 complaints.  If you found culpable of any misconduct in State Bar Court, the badge stays put, even if it far less than what was alleged.

This makes the new proposal three things:  (1) consistent with the previously adopted policy making 15 or more “loan modification” cases a qualification for the threat badge; (2) still unfair in penalizing lawyers who might be exonerated of most charges or the most serious charges at trial; and (3) a massive retreat from the previous proposal’s blanket assumption that any conduct sufficient to warrant discipline creates a threat to the public.

The function of public comment worked here as it is supposed to work.  It helped to prevent over-reaching by the government by forcing it to go back to drawing board and articulate some rational basis for it.  The irony is that it may have worked better this time because there was no call for public comment.  Lawyers that I spoke to regarding the original proposal were outraged by the proposal but even more outraged that they were asked to comment on it.

This when matters affecting the discipline system that are put out for public comment often generate only a trickle of public comment.  Without a doubt this current proposal will less interest and less public comment.  Putting any proposal out in July is a good recipe for an indifferent reaction and many local bar associations are operating a half speed during vacation season.

And this looks like the proposal that should have been offered in the first place and might have if comment had been solicited from the discipline defense bar prior to the original proposal being floated and promptly sunk.  But that doesn’t happen anymore.