Opinion
No. 3 DB 2012
04-01-2013
OFFICE OF DISCIPLINARY COUNSEL, Petitioner v. [ANONYMOUS] Respondent
Attorney Registration No. [ ]
([ ] County)
OPINION
I. HISTORY OF PROCEEDINGS
By Petition for Discipline filed on January 9, 2012, Office of Disciplinary Counsel charged [Respondent] with violations of the Rules of Professional Conduct arising from allegations of misconduct involving a class action lawsuit. Respondent filed an Answer to Petition on March 4, 2012.
A disciplinary hearing was held on June 20, 2012, before a District II Hearing Committee comprised of Chair [ ], Esquire, and Members [ ], Esquire, and [ ], Esquire. Respondent was represented by [ ], Esquire. Petitioner's Exhibits 1 through 19 and 22 were admitted. Respondent's exhibits R-1 and R-4 through R-7 were admitted.
Following the submission of briefs by the parties, the Hearing Committee filed a Report on November 9, 2012, concluding that Respondent violated Rules of Professional Conduct 1.2(a), 3.3(a)(1), 3.3(a)(3), 8.1 (a), 8.4(c) and 8.4(d) and recommending that he be suspended from the practice of law for a period of one year and one day.
The Conclusions of Law in the Report list a violation of RPC 1.2(a), but in the Discussion the Committee remarks that Respondent did not violate 1.2(a).
Respondent filed a Brief on Exceptions on December 17, 2012, and contends that the charges should be dismissed, or in the alternative, if misconduct is found, a public reprimand is the appropriate sanction.
Petitioner filed a Brief Opposing Exceptions on January 7, 2013 and urges the Board to adopt the recommendation of the Hearing Committee.
This matter was adjudicated by the Disciplinary Board at the meeting on January 23, 2013.
II. FINDINGS OF FACT
The Board makes the following findings of fact:
1. Petitioner, whose principal office is situated at Pennsylvania Judicial Center, 601 Commonwealth Avenue, Suite 2700, P.O. Box 62485, Harrisburg, Pennsylvania 17106, is invested, pursuant to Rule 207 of the Pennsylvania Rules of Disciplinary Enforcement, with the power and duty to investigate all matters involving alleged misconduct of any attorney admitted to practice law in the Commonwealth of Pennsylvania and to prosecute all disciplinary proceedings brought in accordance with the various provisions of said Rules.
2. Respondent is [ ]. He was born in 1975 and was admitted to practice law in the Commonwealth of Pennsylvania in 2000. Respondent is currently on active status and maintains his address of record at [ ], Pennsylvania [ ]. Respondent is subject to the disciplinary jurisdiction of the Disciplinary Board of the Supreme Court of Pennsylvania.
3. Respondent has no history of discipline.
4. In 2010, Respondent started the law firm of [A] with partner [ ], where he has remained to the present time. (N.T. 311-312)
5. [A] functioned primarily as a plaintiff's class action referral firm, working primarily to engage clients interested in pursuing class action litigation and then referring those clients to larger class action firms to handle the litigation. (N.T. 313)
6. On September 8, 2010, [A] issued a press release announcing the investigation of potential claims against the Board of Directors of [B] concerning alleged breaches of fiduciary duty and other violations of law related to [B's] proposed sale to [C].
7. Among other things, the press release provided a toll-free number for interested shareholders to call and referred them to Respondent for any questions.
8. Respondent's usual practice in 2010 in responding to calls precipitated by a press release was to speak with the caller, first to collect basic name and telephone information, then to find out how many shares of the relevant stock the caller owned, third to explain that he wanted to file a complaint on behalf of a current shareholder like the caller and to describe the typical relief sought. Respondent always concluded the initial phase of a client contact by asking whether he and his firm could file a complaint on behalf of the caller. (N.T. 326; 267-268)
9. If the caller indicated that he or she was not willing to have the firm file a complaint, it was Respondent's practice to politely end the call. (N.T. 237) If the caller indicated that he or she was unsure about becoming a plaintiff, it was Respondent's practice to similarly end the call. (N.T. 353-343)
10. If the caller indicated that he or she was willing to allow the firm to file a complaint on his or her behalf, it was Respondent's practice at that point to get additional contact information from the client, and to send the client a representation letter and a copy of the proposed or draft complaint. A representation letter was only provided to callers who had already indicated that they were willing to allow the firm to file a complaint. (N.T. 322)
11. On September 8, 2010, [D] saw the press release and telephoned the toll-free number. He spoke to Respondent concerning the proposed [B] tender offer and the litigation which [A] indicated that it was contemplating. (N.T. 310)
12. [D] worked at [B] full time from April 2001 until May of 2004, and then as a consultant for at least another year. (N.T. 34)
13. On September 8, 2010, [D] advised Respondent that he was a former [B] employee and that he owned 3,000 shares of [B] stock. (N.T. 38; 321-322)
14. During the telephone conversation, Respondent told [D] about the legal action that Respondent intended to take concerning the acquisition of [B] by [C]. (N.T. 45)
15. According to Respondent's interpretation of the telephone conversation, he believed that [D] was willing to serve as a class plaintiff. (N.T. 328, 355)
16. [D's] interpretation of the conversation was that he did not agree to act as a plaintiff in the case. (N.T. 49)
17. In the telephone conversation on September 8, Respondent told [D] that he would be sending a representation letter and a draft complaint, and further encouraged [D] to let Respondent know if he had other questions. (N.T. 329)
18. Respondent further advised [D] he should sign the papers and return them to Respondent. (N.T. 329)
19. Respondent advised [D] that he would need to keep at least some of his shares in [B] until the conclusion of the anticipated litigation. (N.T. 330-331)
20. [D] provided Respondent with his email address and agreed to look over any materials Respondent sent. (N.T. 95; 125)
21. This was the last time Respondent and [D] spoke on the telephone. After September 8, 2010, [D] communicated exclusively in writing with Respondent. Respondent telephoned [D] on multiple occasions, leaving voice mail messages. [D] either did not take the calls or did not listen to the messages, nor did he return any of the telephone calls. (N.T. 56-57, 72-73, 79-80, 84-86, 142-143, 156, 164)
22. After the telephone conversation of September 8, Respondent sent [D] an e-mail on September 8, 2010, at approximately 5:25 p.m. EDT, in which, among other things, Respondent attached a representation letter for [D's] review and execution. (ODC-3; N.T. 52- 53)
23. The representation letter states that "[b]y your signature below, you are acknowledging that you have agreed to be represented by [A]..." (ODC-3)
24. [D] never signed or returned the representation letter to Respondent. (N.T. 53. 249-250)
25. On September 9, 2010, at around 9:51 a.m. EDT, Respondent sent [D] an email with a draft complaint for his review, explained that Respondent hoped to file the complaint on that day, and asked [D] to sign the letter and return it to Respondent. (ODC-4)
26. Several hours later, Respondent called [D's] cell phone and left a voice mail message. (N.T. 56-57)
27. Respondent informed co-counsel in [ ] that [D] had the complaint and was reviewing it. Respondent would let co-counsel know about progress. (ODC-14)
28. At 1:07 p.m. EDT, [D] sent an email to Respondent in which, among other things, he stated, "Thanks so much for sending the paperwork and also your call. Let me look it over and get back to you." (ODC -5)
29. By email sent at 1:12 p.m. EDT, Respondent replied by thanking [D] and indicating he wanted to get the complaint filed that day. (N.T. 57-58)
30. On September 9, 2010, several emails followed between Respondent and [D]. (ODC-5; N.T. 222)
31. [D's] position is that he never gave Respondent a "yes/ok" to file a lawsuit. (N.T. 64)
32. Respondent's position is that [D] never clearly or unequivocally advised Respondent that he did not want to pursue the class action lawsuit during the time frame September 9 through October 21, 2010.
33. A class action complaint naming [D] as plaintiff was filed in [ ] State Court at 2:53 p.m. PDT on September 9, 2010.
34. [D] tendered all of his shares of [B] on or around September 10 or 11, 2010. From that point on, [D] had no standing to act as a plaintiff in the case. (N.T. 114-115)
35. [D] never advised Respondent that he had sold all of his shares. (N.T. 330-331; 119; 158)
36. Respondent did not send [D] a copy of the filed complaint or a copy of the amended complaint. (N.T. 71-72; Ans. at 34)
37. On October 22, 2010, [D] learned that he had been listed as a plaintiff in the class action. He advised Respondent by facsimile message that he was not interested in participating in the lawsuit. (N.T. 82-84)
38. On October 22, 2010, Respondent called [D] upon his receipt of the facsimile message, but [D] did not take the call. (N.T. 85-86) [D] listened to the voice mail message Respondent left. He did not return Respondent's call. (N.T. 86-87)
39. On October 22, 2010, after receipt of [D's] facsimile message, Respondent called lead plaintiffs' counsel at the firm of [E] in [ ] and asked lead counsel to dismiss [D] from the [B] litigation. (N.T. 332-333)
40. On October 22, 2010, Respondent asked his partner [ ] to forward [D's] facsimile message to [E], which she promptly did. (N.T. 332-333; 369-370)
41. [D's] complaint was dismissed, although not as expeditiously as Respondent would have liked. (N.T. 337) Respondent had no control over the speed with which the complaint was dismissed. (N.T. 337)
42. A few weeks before [D] directed Respondent to remove him as a plaintiff in the [B] litigation, on or about September 30, 2010, Respondent left a voice mail message for [D] advising him of the pending settlement proposals in the litigation. (N.T. 271-273) [D] deleted this message without listening to it. (N.T. 79-80)
43. Lead counsel for the plaintiff class and counsel for the defendants in the [B] litigation reached an agreement in principle for resolution of the litigation on or about October 5, 2010. (N.T. 278-279; P-18)
44. On or about October 5, 2010, lead counsel for the plaintiff class executed a Memorandum of Understanding on behalf of all four named plaintiffs in the litigation, including [D]. (N.T. 278-279)
45. Respondent was not involved in the settlement discussions and did not know about the Memorandum of Understanding until he received a copy sometime after October 5, 2010. (N.T. 280) He did not send [D] a copy of the Memorandum. (N.T. 280)
46. [D] filed a complaint with the [ ] State Bar Association, Office of Disciplinary Counsel. In connection with that complaint, Respondent submitted a Declaration dated January 11, 2011. (Pet. For Disc at 51, Ans. at 51)
47. Respondent certified that his statements in the Declaration were true and correct as it was his understanding that [D] gave his authorization to be involved as a plaintiff.
48. In response to Petitioner's letter seeking Respondent's position in the instant matter, Respondent made statements in accordance with his understanding that [D] was his client. (ODC-10)
49. Respondent did not make false statements in his Declaration or in his response to Petitioner's letter.
50. Respondent's testimony was credible and consistent that he believed that [D] authorized the lawsuit and that [D] was Respondent's client.
51. As a result of what occurred with [D], Respondent has changed his office procedures. (N.T. 343) Respondent now ensures that he has a signed representation letter returned from a plaintiff before filing a complaint on his or her behalf, even though the client had provided a verbal authorization to proceed with the complaint. In addition, Respondent now makes sure that plaintiffs get copies of filed pleadings, especially filed complaints. (N.T. 346-347)
52. Respondent has acknowledged that he made mistakes in his handling of the [D] matter, in particular failing to forward copies of the filed complaint and the filed amended complaint to [D] and in not providing [D] with a copy of the Memorandum of Understanding as soon as Respondent reviewed it himself. (N.T. 346-347; 358)
53. Respondent has expressed sincere remorse regarding the entire situation with [D]. (N.T. 345)
54. Respondent apologized to [D] following the correspondence of October 22, 2010. Respondent left a voice mail and said he was sorry for the misunderstanding. (N.T. 346)
III. CONCLUSIONS OF LAW
By his conduct as set forth above, Respondent violated the following Rules of Professional Conduct:
1. RPC 1.1 - A lawyer shall provide competent representation to a client. Competent representation requires the legal knowledge, skill, thoroughness and preparation reasonably necessary for the representation.
2. RPC 1.2(a) - Subject to paragraphs (c) and (d), a lawyer shall abide by a client's decision concerning the objectives of representation and, as required by Rule 1.4, shall consult with the client as to the means by which they are to be pursed. A lawyer may take such action on behalf of the client as is impliedly authorized to carry out the representation. A lawyer shall abide by the client's decision whether to settle a matter.
3. Office of Disciplinary Counsel failed to meet its burden of proof by clear and satisfactory evidence that Respondent violated Rules of Professional Conduct 3.3(a)(1), 3.3(a)(3), 8.1(a), 8.4(c), and 8.4(d). Accordingly, these violations are dismissed.
IV. DISCUSSION
This matter is before the Board on a Petition for Discipline charging Respondent with misconduct arising out of allegations that he falsely purported to represent a client in a class action lawsuit without the purported client's knowledge and authorization. Respondent is also charged with making material misrepresentations of fact to other lawyers, the court and in the context of disciplinary proceedings. Finally, Respondent is charged with violating rules regarding competence and representation of a client and abiding by a client's decisions.
Petitioner bears the burden of proving by a preponderance of the evidence that is clear and satisfactory that Respondent engaged in professional misconduct. Office of Disciplinary Counsel v. Surrick, 749 A.2d 41 (Pa. 2000). Initially, it is necessary to address the parties' contentions regarding Petitioner's documents. Respondent claims that Petitioner failed to move its documents into evidence and thus the Hearing Committee erred in relying upon such documents. Respondent first raised this issue in its brief to the Hearing Committee following the close of the record. The Hearing Committee addressed this issue in its Report and was satisfied that Petitioner's exhibits were properly presented and accepted by the panel in their entirety even though Petitioner did not use the language "I move.." (N.T 38) Respondent's counsel specifically objected to three exhibits. (N.T. 10) During testimony of Petitioner's first witness, counsel supplied the entire packet of exhibits to both the witness and the Hearing Committee and no objection was made at that time. For these reasons, we conclude that the exhibits were properly introduced into evidence.
The central question in this disciplinary proceeding is whether [D] authorized the filing of a complaint on his behalf in the [B], thus becoming Respondent's client. Both Respondent and Petitioner agree that there was a telephone conversation on September 8, 2010, between [D] and Respondent in response to a press release issued by Respondent's law firm concerning the sale of [B]. The recollections of the parties to the conversation diverge as to the content of that conversation. Respondent testified clearly and unequivocally that [D] authorized him to file a complaint. [D] testified just as strongly that he did not authorize Respondent to file a complaint.
Both Respondent and Petitioner agree that some weeks later, on October 22, 2010, [D] clearly and unequivocally advised Respondent that he did not wish to be involved in any action against [B] and he directed Respondent to dismiss him from the litigation. Respondent took the steps necessary to remove [D] from the lawsuit.
The communications between Respondent and [D] in the intervening time frame of September 9, 2010 and October 21, 2010, which consisted solely of voice mail and email messages on Respondent's part and email messages on [D's] part, can be viewed as consistent with both Respondent's and [D's] understanding and belief regarding the nature of the relationship between them. These emails were somewhat ambiguous. It is apparent from the emails that [D] never clearly stated he did not want to be a plaintiff in the action. While a telephone conversation may have resolved this issue, [D] did not answer Respondent's telephone calls. Viewed from Respondent's perspective, there was nothing about the written communications that indicated a withdrawal of [D] as plaintiff from the litigation.
The Hearing Committee did not find that Respondent was untruthful in his testimony regarding his conversation with [D] on September 8, nor was [D] found to be a more credible witness than Respondent. A review of the record demonstrates that Respondent's testimony was credible and supports the conclusion that an attorney-client relationship existed with [D].
Respondent testified credibly as to the usual practice and procedure that took place when he responded to calls precipitated by a press release. In his practice, he only provided representation letters and copies of complaints to those who already indicated a willingness to allow the firm to file a complaint on their behalf. The representation letter sent to [D] stated "[b]y your signature below, you are acknowledging that you have agreed to be represented by [A]." (P-3) This is consistent with Respondent's testimony that at the time he forwarded the representation letter to [D], [D] had already agreed to be represented by Respondent's law firm and had already agreed to have a complaint filed. Respondent's testimony throughout the hearing remained consistent as to that belief. Only upon clearly and unequivocally being informed by [D] that he did not want to be a plaintiff did Respondent immediately take steps to remove him. Prior to that time, Respondent labored under the reasonable belief that [D] was his client and the email correspondence merely reflected the early stages of communication between an attorney and a new client regarding a new piece of litigation.
Respondent is charged with violations of Rules of Professional Conduct 1.1, 1.2(a), 3.3(a)(1), 3.3(a)(3), 8.1(a), 8.4(c), and 8.4(d). Based on our conclusion that there was an attorney-client relationship between Respondent and [D] and that [D] authorized the filing of a complaint, we find that Respondent did not violate Rules 3.3(a)(1) and (3), 8.1(a), 8.4(c) and 8.4(d). The evidence presented by Petitioner does not clearly and satisfactorily demonstrate that [D] communicated to Respondent that he did not want to proceed with the [B] litigation at any point between September 8 and October 22, when at last he did clearly communicate such intent. The email communications are too ambiguous to conclude that Respondent knew [D] was not his client, yet knowingly filed a lawsuit in his name. Therefore, the statements that Respondent made in the Declaration in connection with the [ ] State matter and to Petitioner in connection with the instant matter were not false. Similarly, we conclude that Respondent did not engage in dishonesty, deceit or misrepresentation and did not engage in conduct prejudicial to the administration of justice.
Respondent violated Rules of Professional Conduct 1.1 and 1.2(a). As attorney for [D], he failed to forward copies of the filed complaint and amended complaint to [D] and failed to forward a copy of the Memorandum of Understanding to [D]. Respondent acknowledges that mistakes were made in the handling of [Ds] matter. He has instituted office procedures to ensure he avoids this type of situation in the future. He now requires that a signed representation letter from a potential client be in hand before filing a complaint.
The primary purpose of the disciplinary process is to protect the public from unfit attorneys and to preserve public confidence in the legal profession and the judicial process. Office of Disciplinary Counsel v. Stern, 526 A.2d 1180 (Pa. 1987).
It is apparent from the record that there was a colossal misunderstanding between Respondent and [D] which led to an extremely unfortunate chain of events. There is no evidence that Respondent was dishonest or deceitful in his actions, nor is there a scintilla of evidence that he is currently unfit to practice law. Respondent has acknowledged his mistakes and has remedied his office procedures to avoid any such future occurrences. We are persuaded that this case calls for private discipline in the form of a Private Reprimand.
V. DETERMINATION
The Disciplinary Board of the Supreme Court of Pennsylvania unanimously determines that the Respondent, [ ], shall receive a Private Reprimand. The expenses incurred in the investigation and prosecution of this matter are to be paid by the Respondent.
Respectfully submitted,
THE DISCIPLINARY BOARD OF THE
SUPREME COURT OF PENNSYLVANIA
By:___
R. Burke McLemore, Jr., Board Member
Board Members Momjian and Hastie did not participate in the adjudication.