Overlawyered: Chronicling The High Cost Of Our Legal System

Posts Tagged ‘ethics’

Lerach Coughlin partner faces D.C. ethics charges

G. Paul Howes, who’s handled Lerach’s high-profile litigation over losses arising from the Enron collapse, faces serious ethics charges over actions he took during his earlier career as a federal prosecutor. “On Feb. 1, the D.C. Bar Counsel filed eight charges against Howes after a four-year investigation, accusing him of violating bar ethics rules by committing criminal acts, making false statements in court, offering prohibited payments to witnesses, and interfering with the administration of justice.” Ethics proceedings against federal prosecutors are rare; disbarment is among the possible sanctions that could be asked. It doesn’t appear Howes is going to win any popularity contests among his former law enforcement colleagues:

Amy Jeffress, deputy chief of the office’s Organized Crime and Narcotics Trafficking Section[,] referred to Howes — though not by name — during a Jan. 31 debate on the power of prosecutors at American University, Washington College of Law.

“He actually left the office and moved all the way across the country to San Diego to escape his shame and his bad reputation,” Jeffress said, according to a recording of the debate. “He basically became a pariah in our office. His name is a synonym around our office for no-no. You don’t want to do what he did.”

(Brendan Smith, “Former Prosecutor Charged With Misconduct in Gang Cases”, Legal Times, Feb. 15).

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Wilkes & McHugh sued over alleged Tenn. fee grab

Tampa-based Wilkes & McHugh, which has enjoyed much success filing suits against nursing homes in many states, “is now on the defense end of a suit that contends the firm knowingly violated Tennessee law regarding contingency fees.” Former client Debbie Howard, who hired the firm to sue a Memphis nursing home, says it “engaged in an unlawful scheme to collect 40 percent or 45 percent in contingency fees of settlement amounts, although Tennessee law caps fees to 33 and 1/3 percent in medical malpractice cases. The complaint says the law firm charged the higher and unlawful contingency fee to hundreds of clients in Tennessee.” In its response, the law firm says the complaint is “scurrilous” and based on falsehoods, and says Howard never appealed a Tennessee court order approving the fees. (Liz Freeman, “Tampa law firm faces contingency fees lawsuit”, Naples (Fla.) News, Jan. 14; Scott Barancik, “Firm gets a taste of dish it serves”, St. Petersburg Times, Feb. 17). For more on the law firm, see Mar. 13-14, 2001, Jul. 6, 2005, and Jun. 22, 2006, as well as Scott Barancik, “Law firm’s success against nursing homes has a price”, St. Petersburg Times, Jul. 24, 2004.

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What Lincoln said

Abraham Lincoln, as we’re sometimes reminded around this time of year, made a living as a practicing lawyer, much of it in trial practice. For some reason this website has never gotten around to citing Lincoln’s Notes for a Law Lecture, possibly his best-known pronouncement on the ethics and practicalities of law practice. Some highlights:

“Discourage litigation. Persuade your neighbors to compromise whenever you can. Point out to them how the nominal winner is often a real loser — in fees, expenses, and waste of time. As a peacemaker the lawyer has a superior opportunity of being a good man. There will still be business enough.”

“Never stir up litigation. A worse man can scarcely be found than one who does this. Who can be more nearly a fiend than he who habitually overhauls the register of deeds in search of defects in titles, whereon to stir up strife, and put money in his pocket? A moral tone ought to be infused into the profession which should drive such men out of it.”

“There is a vague popular belief that lawyers are necessarily dishonest. I say vague, because when we consider to what extent confidence and honors are reposed in and conferred upon lawyers by the people, it appears improbable that their impression of dishonesty is very distinct and vivid. Yet the impression is common, almost universal. Let no young man choosing the law for a calling for a moment yield to the popular belief — resolve to be honest at all events; and if in your own judgment you cannot be an honest lawyer, resolve to be honest without being a lawyer. Choose some other occupation, rather than one in the choosing of which you do, in advance, consent to be a knave.”

Among those calling attention to Lincoln’s comments on lawyering this week are David Giacalone (Feb. 12; see also here and here) and Daniel E. Cummins in Pennsylvania Law Weekly (“Lincoln Logs of Wisdom”, Feb. 12), both of whom offer additional quotations of interest.

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Jack Thompson faces possible disbarment

Aw, that’s not fair. What would we do for material? “Thompson’s ire [at the alleged evils of videogaming] spread to several law professionals involved in the lawsuits he filed. The disbarment proceedings resulted from separate grievances filed by people claiming that Thompson made false statements and attempted to humiliate, embarrass, harass or intimidate them, according to documents in the [Florida bar disciplinary] case.” (K.C. Jones, ” Grand Theft Auto Critic Faces Misconduct Charges”, InformationWeek, Feb. 6; “Jack Thompson Faces Florida Supreme Court Disciplinary Hearing”, GamePolitics.com, Feb. 3; Billy Berghammer, “Jack Thompson Faces Florida Disciplinary Hearing”, Game Informer, Feb. 5). More: Oct. 30, Oct. 20, and many others.

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Lowering fees — and infuriating colleagues?

“I recently ran a television advertisement offering to represent car accident victims in exchange for a 15 percent contingency fee, which is more than 50 percent less than the traditional 33 percent contingent fee. …One of the goals of my advertising campaign is to reform the tort system in the marketplace, without the need for legislation. … Making a lower contingency fee the centerpiece of an ad campaign, albeit just for car accident victims, educates consumers about the standard fee and how a lower contingency fee can benefit them, by putting more of the net recovery in their pocket.” New Haven, Ct. attorney Joshua A. Winnick sure isn’t angling for popularity among his peers (“Putting a Price on Plaintiffs Work”, Connecticut Law Tribune, Dec. 28). More: David Giacalone.

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Lawyer: guess maybe we burned that fee documentation

Sensational new disclosures in the scandal (Mar. 6, Aug. 25, etc.) over self-dealing by lawyers in divvying up the results of fen-phen litigation in Kentucky:

The three lawyers accused of plundering Kentucky’s $200 million fen-phen settlement “tore up or burned” notes showing how much they paid themselves and their clients, according to one of the lawyers.

Depositions obtained by The Courier-Journal include Lexington attorney Melbourne Mills Jr.’s description of a secret meeting that he said he and lawyers William Gallion and Shirley Cunningham Jr., also of Lexington, held at Gallion’s house in 2001 to divvy up an extra $10 million beyond what they’d already paid themselves from the settlement. …

[Attorney Angela] Ford alleges that Mills’ description is a “dramatic indication of a cover-up.”

She has asked that those lawyers and another attorney, Stan Chesley of Cincinnati, who helped negotiate the settlement, be forced to surrender $62.6 million in funds they allegedly misappropriated — as well as $59.5 million they paid themselves in fees….

Kentucky courts have never required a lawyer to “disgorge” or return a fee for misconduct, but courts in other states have done so, according to Ford’s motion….

Chesley, who was hired by the Lexington lawyers to negotiate the settlement, said he had no reason to question why he was paid $20.5 million — $7 million more than his contract outlined — in part because he could not “believe that these good folks would have sent me more money than I was entitled to.”

In her motion to force the lawyers to give up their fees, Ford said the defendant lawyers, including Chesley, breached their duties in a “spectacular and unparalleled way” by giving only about one-third of the settlement to the clients.

“The facts of this case truly are as egregious as it gets,” she said in court papers. ..

Since the settlement, Gallion and Cunningham have both become permanent residents of Florida, a state that Ford notes allows debtors to keep their homes when they take bankruptcy.

Stanley Chesley was, and remains, one of the most famous plaintiff’s lawyers in the United States and a major powerbroker in national Democratic politics. The article also sheds further light on the close ties between now-disgraced Judge Joseph F. (“Jay”) Bamberger, who approved the Kentucky fen-phen settlement and has since resigned, and the plaintiff’s team in the litigation. (Andrew Wolfson, “Lawyer: Fen-phen notes destroyed”, Louisville Courier-Journal, Jan. 21).

More: a companion piece in the same paper profiles the Cincinnati-based Chesley (Andrew Wolfson, “A breach of duty; wealth mounts for ‘prince of torts'”, Louisville Courier-Journal, Jan. 21)(via Lattman).

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Worst judges, cont’d

On Jan. 5 we linked a story about an Alabama lawyer who faces serious disciplinary action because he collected a $1.2 million fee for writing a will for a dying man without in fact meeting the man; after the controversy had arisen, voters elevated him to the bench. Now, in North Carolina, authorities are wondering what to do about Judge James Ethridge, “stripped [by the state bar] of his law license in October after deciding he had swindled an ailing, older woman of her home and life savings while he was a lawyer in 2001. …Without a law license, Ethridge is barred from holding court and signing orders. But he is not barred from keeping the job,” in which he has presided over criminal and family cases arising in Johnston, Harnett and Lee counties. “The predicament is getting expensive. …The state may be forced to pay Ethridge’s annual salary of $101,376 until his term as judge ends in December 2008” and in the mean time taxpayers are shelling out for substitute judges to hear the cases. (Mandy Locke, “Disbarred judge can’t hold court but holds onto pay”, Raleigh News & Observer, Jan. 9).

Update: Per Dr. Mary Johnson in comments, Ethridge has resigned.

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More on privacy-protecting lawyers

The Anthony Pellicano wiretap scandal grinds on: Per a new report in the New York Times, attorney Terry Christiansen was happy to feed investor Kirk Kerkorian information obtained by Pellicano’s wiretaps on Kerkorian’s ex-wife, though no one has charged the investor with knowing about the taps. A lawyer for Christiansen terms the report “totally unfounded” and “a pack of lies”. (David M. Halbfinger and Allison Hope Weiner, “Lawyer Gave Information to Kerkorian”, Jan. 10).

Not entirely unrelatedly, a front-page report in the Wall Street Journal last month takes note that “Hewlett-Packard Co.’s much-criticized campaign this year to trace boardroom leaks has made ‘pretexting’ a dirty word in corporate circles. But the H-P project was far from the first to rely on pretexting, which generally involves impersonating people to get their phone or financial records, a review of recent business history shows. The practice for years has been almost a commonplace tool, resorted to in efforts ranging from commercial litigation to divorce fights to the search for deadbeat borrowers.” (John R. Emshwiller, “Hewlett-Packard Was Far From First To Try ‘Pretexting'”, Dec. 16). Hmmm… which profession is it that regularly gets involved in commercial litigation, divorce fights, and the search for deadbeat borrowers? Former HP general counsel Ann Baskins resigned after her role in failing to prevent the pretexting scandal came to light. How much company would Baskins have if the legal profession suddenly got serious about ‘fessing up to the practice? (Paul McNamara, “A deep look at the role HP’s top lawyer played in spy scandal”, Network World, Dec. 21; Sue Reisinger, “Did Ann Baskins See No Evil at HP?”, Corporate Counsel, Dec. 18).

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Alabama: a case of ethically failing upward?

“The state bar ordered that Stuart DuBose’s law license be suspended because of his role in an estate in which he collected a $1.2 million fee for writing a client’s will without ever meeting the dying man.” And DuBose faces a possibility of even sterner disciplinary action, such as a longer suspension or even disbarment, because the “Alabama Supreme Court ruled that the 45-day suspension wasn’t sufficient punishment for his actions.” However — and this is the part that really makes the story so perfect — DuBose is not exactly hurting professionally at the moment because voters in November elected him to be the circuit judge for Choctaw, Clarke and Washington counties despite publicity over the allegations. Although his official term does not begin until Jan. 15, he has already been sworn in. According to one newspaper account, disciplinary action could affect his ability to serve as judge. (“Jackson attorney still under ethics cloud takes oath early”, AP/AL.com, Dec. 23; Jim Cox, “Area lawyers once against, now for DuBose judgeship”, Clarke County Democrat, Dec. 14; Evan Carden, “DuBose takes oath to be circuit judge”, Clarke County Democrat, Dec. 28).

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His “day in court”, eleven years’ worth

Atlanta: “The term ‘litigious’ is frequently tossed about in legal circles, but on Wednesday its apparent embodiment stood in shackles before a Fulton County, Ga., judge who patiently heard him out before sending him back to the jail where he had spent the night.” 88-year-old attorney Moreton Rolleston, Jr., “who in October was feted for 50 years as a member of the Georgia Bar” and who once represented himself as the owner of the Heart of Atlanta motel in a landmark Supreme Court discrimination case, has been battling for 11 years “to avoid paying a $5.2 million judgment from a 1995 malpractice case brought by the estate of a former client”. “Rolleston has sued the [late client’s estate and lawyer], he sued the sheriffs of Fulton and Glynn counties, he sued the purchasers of properties sold to pay the judgment — he even sued the original trial judge, Isaac Jenrette.” “No one has been given more opportunity to have his day in court; and day, and day, and day, at great expense to all,” said the opposing attorney, Shelby A. Outlaw. (Greg Land, “In Shackles, 88-Year-Old Lawyer Argues His Case — and Loses Again”, Fulton County Daily Report, Dec. 11).

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