kelley fm auto cx 11/13/01 12:50 PM Page i Lawyers Crossing Lines

Transcription

1 kelley fm auto cx 11/13/01 12:50 PM Page i Lawyers Crossing Lines

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3 kelley fm auto cx 11/13/01 12:50 PM Page iii Lawyers Crossing Lines Nine Stories James L. Kelley C a rolina Academic Pre s s D u rham, North Caro l i n a

4 kelley fm auto cx 11/13/01 12:50 PM Page iv 2001 James L. Kelley All Rights Reserv e d ISBN LCCN C a rolina Academic P re s s 700 Kent Stre e t D u rham, North Caro l i n a Te l e p h one (919) Fax (919) cap-pre s s. c o m w w w. c a p - p re s s. c o m P r i nted in the United States of America.

5 kelley fm auto cx 11/13/01 12:50 PM Page v For my student s

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7 kelley fm auto cx 11/13/01 12:50 PM Page vii Contents P re f a c e A c k n o w l e d g m e n t s i x x i i i Chapter 1 A Liar for a Client 3 Chapter 2 The Case of the Frozen Bro c c o l i 21 Chapter 3 B re a k i ng Up Is Hard to Do 47 Chapter 4 Of Chinese Walls and Co m f o rt Zon e s 63 Chapter 5 Two Scorpions in a Bottle 85 Chapter 6 The Gatekeeper 105 Chapter 7 Hot Seat 127 Chapter 8 Ambulance Chasing Redux 139 Chapter 9 S p e ctator Sport 161 A f t e rw o rd S o u rc e s I n d e x v i i

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9 kelley fm auto cx 11/13/01 12:50 PM Page ix Preface This is a collect i on of true stories about lawyers who crossed lines and ended up being sued for malpractice, disbarred, or pro s e c u t e d. Based on the re c o rds of litigated cases, the stories are rich in detail, sometimes bizarre, and always sad sad because they are about self-infli cted wounds and betrayals of tru s t. Lawyers Crossing Lines is intended as supplemental re a d i ng for stud e nts in pro f e s s i onal re s p onsibility courses at American law schools. I have taught pro f e s s i onal re s p onsibility as an adjunct professor at G e o rgetown University Law Center in Wa s h i ng t on, D.C. for the past s e v e ral years, assigning widely used casebooks. Casebooks include much e s s e ntial material, but their manner of pre s e nt a t i on whether of appellate decisions, rules, or excerpts from comment a ry is necessarily somewhat abstract. The stories in this book go beyond the dry re c i t a- t i ons in edited cases to the settings and human elements that emerg e f rom court testimon y, re v e a l i ng more of the realities of law practice and the people behind the parties and their counsel. Each story is followed by comments and questions on the issues it pre s e nt s. Why tell stories to students of pro f e s s i onal re s p onsibility? Of course, t h e re is nothing wrong with making a law school class int e re s t i ng for the s t u d e nts. More import a nt, principles of legal ethics are more eff e ct i v e l y c onveyed, and more likely to be re m e m b e red, when narratives of re a l e v e nts supplement tra d i t i onal casebooks. Oliver Sachs said it well in T h e Man Who Mistook His Wife for a Hat: To re s t o re the human subject at the cent re, we must deepen a case history to a narrative or tale. A course in pro f e s s i onal re s p onsibility should be about more than l e a rn i ng the rules well enough to pass the Multistate Pro f e s s i onal Res p onsibility Examination. It should pre p a re students for the pro b l e m s and pre s s u res they are likely to face after gra d u a t i on. For example, a s t o ry about a firm fra u d u l e ntly incre a s i ng billable hours (Chapter 5, Two Scorpions on a Bottle ) can be an eff e ctive launch for discussion of the minimum billable-hours re q u i re m e nts imposed on associates in many big firms today, and the pre s s u res those re q u i re m e nts exert to in- i x

10 kelley fm auto cx 11/13/01 12:50 PM Page x x P re f ac e flate billable hours or do unnecessary work. A story about a part n e r o v e rr i d i ng associates con fli ct - o f - i nt e rest con c e rns (Chapter 3, Bre a k- i ng Up Is Hard to Do ) poses a not uncommon dilemma and may suggest questions students might raise in job int e rviews. Will my ethics conc e rns be re s p e cted? Can I take my con c e rns anonymously to an ethics c o m m i t t e e? Liars in Co u rt relates painful realities in re p re s e nt i ng a c l i e nt who turns out to be a liar and subsequently sues the law y e r for malpractice. The lawyer is caught between con fli ct i ng duties of loyalty to the client and telling the tru t h. The Case of the Frozen Broccoli tells the story of two l awyers who crossed, sometimes leaped over, lines between legitimate re p re s e nt a t i on of a criminal ent e r p r i s e the Co l u m b i a n cocaine cart e l and assisting criminal act i v i t y. Con fli cts of int e rest are a core con c e rn of pro f e s s i onal res p on s i b i l i t y. Bre a k i ng Up Is Hard to Do int roduces the subj e ct with a stra i g h t f o rw a rd con fli ct between curre nt clients. Of Chinese Walls and Co m f o rt Zones involves a form e r- c l i e nt situ a t i on that raises complex theoretical and policy issues. The Gatekeeper is about an associate who gets in over his head re p re s e nt i ng an underwriter in a questionable securities o ff e r i ng. The partner ostensibly re s p onsible for superv i s i ng the associate leaves him twisting in the wind. The setting of Hot Seat is Salomon s Brothers, then the d o m i n a nt govern m e nt bond trader in New York and the subject of the best-selling memoir, L i a r s Poker. A trader submitted a false bid in a Tre a s u ry auct i on which senior management failed to re p o rt to the govern m e nt, cont ra ry to the advice of its chief legal offic e r. The story illustrates pre s s u res on in-house counsel and the whistleblower pro b l e m Ambulance Chasing Redux describes aggressive and t acky solicitation of victims of an airplane crash by the firm of John O Quinn, a nationally-known tort law y e r. Nevertheless, it calls phro p h y l actic solicitation rules into question, con s i d e r i ng the quality of re p re s e nt a t i on provided by lawyers like O Quinn and the need to level the playing field against insurance adjusters.

11 kelley fm auto cx 11/13/01 12:50 PM Page xi P re f ac e x i Spectator Sport describes a particularly egregious failu re to provide eff e ctive re p re s e nt a t i on to a defendant in a capital case in a system i n c l u d i ng prosecutors and judges, as well as defense law y e r s which con d ones, even supports, incompetence. The select i on of a case for chapter tre a t m e nt was based on three criteria: whether it raises signific a nt issues of legal ethics; whether it lends itself to classroom discussion; and whether a good story could be ext racted from its voluminous re c o rd. Several pro m i n e nt experts appear in the stories as witnesses or counsel, including Sherman Cohn, David Epstein, Marvin Frankel, Stephen Gillers, Geoff rey Hazard, Thomas Morgan, and Charles Wo l f ram. The cases I selected are relatively re c e nt. All w e re decided in the 1990s, and two were pending on appeal as the book w e nt to pre s s. I t s a myth that public re c o rds, like trial transcripts, are re a d i l y available to the private citizen, whether for re s e a rch or other purposes. Some courts or court re p o rters charge $1 or more per page, making s o u rce material from the courts for a book like this prohibitively expensive. Fort u n a t e l y, in most cases I was gra nted free access to the full trial re c o rd by the pre v a i l i ng part y s law y e r. I had the bulk of the re c o rd s ra ng i ng from 2,000 to 7,000 pages per case, some 30,000 pages in all duplicated at commercial copy shops at re a s onable cost. All of the stories are based on transcripts and other court re c o rds, with one except i on. The re c o rd of the SEC investigation related to the Salomon false-bid scandal from which the Hot Seat story is drawn fills seven h u n d red storage boxes. In re s p onse to my Freedom of Inform a t i on Act request, the SEC advised that the cost of its pre - release review would be s e v e ral hundreds of thousands of dollars. That story had to be based on the SEC s published decision and media ac c o u nt s. Over half of the stories involve miscon d u ct, or alleged miscon d u ct, in law firms of one hundred or more lawyers. Three of those firm s G i b s on, Dunn & Cru t c h e r, Pillsbury, Madison & Sutro, and, until it dissolved in the wake of malpractice and fraud judgments, Keck, Mahin & Cate a re (or were) among the biggest firms in the count ry. Two stories involve lawyers in specialized criminal defense and personal injury p ractices, and a third con c e rns an in-house counsel for a large company. The book includes only one story about a sole general pract i t i on e r, the type of lawyer who (complaints to disciplinary authorities suggest) commits most of the malpractice. In the main, however, those complaint s c h a rge neglect, con v e r s i on of funds, and other common defaults that,

12 kelley fm auto cx 11/13/01 12:50 PM Page xii x i i P re f ac e while import a nt to the client, are not good candidates for law school d i s c u s s i on. Because the stories are based ent i rely on matters of public re c o rd, I was free to, and did, use real names of people, law firms, and p l aces, with one exception in which access to the re c o rd was con d i t i on e d on my not using the real names of the plaint i ff s. The stories collectively involve the diverse sources of law govern i ng ethical re s p onsibilities of lawyers: State ethics codes, common - l aw fid u- c i a ry obligations, and criminal and civil statutes and ru l e s such as obs t ru ct i on of justice and securities fra u d h a v i ng count e r p a rts in codes of ethics. Of those sources, the American Bar Association s Model Rules of Pro f e s s i onal Con d u ct, in force in some form in over forty States and the District of Columbia, are most fre q u e ntly involved, either in the s t o ry itself or in the comments and questions following it. In the four stories of civil malpractice, the court and parties relied substantially on the Model Rules as evidence of the standard of care, despite the disclaimer in the Rules that a violation should not give rise to a cause of act i on, nor should it create any pre s u m p t i on that a legal duty has been b re ached. The most re l e v a nt rules are cited and quoted, if short a s they arise in the stories. Students can refer to their selected standard s books for the longer rules and official comment s. S e v e ral chapters describe gross miscon d u ct b i l l i ng fraud, falsifying evidence, hara s s i ng ac c i d e nt vict i m s the kinds of things that give l awyers a bad name. It should go without saying that the book is not intended as a port rait of how the pro f e s s i on as a whole behaves. These are c a u t i on a ry tales. There is, of course, no objective way to measure levels of ethical con d u ct among lawyers. Informed judgments about the seriousness and scope of miscon d u ct come from pract i t i oners, disciplinary authorities, m a l p ractice insurers, and students of the problem. Based on thirty years as a lawyer in private practice and govern m e nt and as a law school teacher of ethics, I believe that the great majority of lawyers play by the ru l e s m o s t of them scru p u l o u s l y, others in their fashion. Not many flout them. The stories show how the rules apply to lawyer miscon d u ct in some typical settings. Why lawyers break the rules raises difficult questions to which there are no complete answers. It is sometimes possible, however, to identify re c u rr i ng patterns which may contribute to miscon d u ct, and which may point the way to corre ctive re g u l a t i on. A few such pattern s a re sketched in the afterw o rd. J. L. K. Takoma Park, Mary l a n d O ctober 2000

13 kelley fm auto cx 11/13/01 12:50 PM Page xiii Acknowledgments I am grateful to Professors Peter Byrne, Sherman Cohn, David Luban, and Julie O Sullivan of Georgetown University Law Center and Lisa Lerman of Catholic University School of Law for re a d i ng drafts of chapters. Their comments greatly improved the pro d u ct. Special thanks to Professor Milton Regan of Georgetown who commented on much of the text and made many helpful suggestions. Thanks also to legal ethics e x p e rt Robert O Malley for helping me understand the M a r i t r a n s c a s e, and to criminal defense lawyer John Villa for his perspectives on Chapter 2. I was given access to court re c o rds and transcripts by Stephen Bright, Dire ct o r, Southern Center for Human Rights, by Assistant United States Attorney Edward Ryan, Southern District of Florida, and by pract i c i ng attorneys Plato Cacheris, John Dowd and Jonathan Ty c k o in Wa s h i ng t on, D.C.; Denise Pallante in Philadelphia; Kathy Patrick in H o u s t on; and Broadas Spivey in Austin, Texas. Thanks to my neighbor, B ryan Sayer, for debugging my computer, and to my niece, Cathy Harb o u r, for copy editing. The idea for this book came from my friend Peter Byrne and was refined with him over numerous lunches at The Irish Times. I appreciate the freedom that Keith Sipe, publisher of Carolina Academic Press, allowed me in developing the original proposal, based on things I learned along the way. Finally, my thanks to the Virginia Center for the Creative Arts for giving me a friendly and stimulating place to finish this book. x i i i

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