Welcome to the Lawyer Ethics Newsletter for November 2016
Legal Malpractice Statute Not Tolled While Lawyers Deliver the Files and Withdraw from PTO Matters
GoTek Energy v. SoCal IP Law Group LLP, Second App. Dist., Div. 6, filed 10/12/16. Plaintiff employed law firm to file patents. Law Firm failed to file patents in all necessary jurisdictions and admitted its negligence to the client. Client informed law firm on November 5, 2012 that it intended to pursue a malpractice claim. Law Firm sent client notice of November 7, 2012, informing the client that, in view of the malpractice claim, they were withdrawing “forthwith” and asking the client where the files should be sent. Client responded on November 8 with instructions regarding sending the files to their new lawyers. The files were ultimately transferred on November 15. The Client filed their malpractice action on November 14, 2013. Law Firm was successful in its summary judgment motion. Client appealed, contending that there was a triable issue of fact as to when the law firm ceased to represent them. The Court of Appeal upheld the summary judgment, finding that, as a matter of law, the statute of limitations began to run no later than November 8, 2012. The transfer of files and withdrawal from filed matters were mere ministerial acts that did not constitute continuing representation.
Fourth District Court of Appeal Tempers Language in SDOG Opinion
City of San Diego v. San Diegans for Open Government, Fourth App. Dist., Div. 1, case no(s) D068939, D069890, filed 10/17/16. The Court of Appeal issued an amended decision striking references to “criminal” and “illicit” conduct. In the original decision filed 9/22/16, the Court had referred to SDOG’s filing of actions while a suspended corporation as potentially criminal conduct, attracting a great deal of attention and raising eyebrows among legal ethics experts.
Supreme Court Appoints Justice Lui to Serve As Special Master in Evaluating State Bar Fee Request
The California Supreme Court has appointed Justice Elwood Lui to serve as special master to assist the Court in obtaining further information from the State Bar of California regarding its request for a order assessing fees against State Bar members to fund State Bar operations. Justice Lui previously served as special master when the Supreme Court ordered a special assessment in December 1998 to fund the discipline operations of the State Bar (In re Attorney Discipline System (1998) 19 Cal.4th 582.) The State Bar submitted a request to the Supreme Court on September 30, 2016 for an order following the failure of the Legislature to pass a fee bill. Unlike the State Bar’s request in 1998, the State Bar’s current request asks for funding for a number of State Bar organs not directly related to the discipline system, such as the California Young Lawyers Association.
MCLE Compliance Season Is Upon Us
It’s that time of year when California attorneys with last names beginning N – Z must prepare to report their compliance with MCLE requirements by the January 31, 2017 deadline. The San Diego County Law Library is presenting a series of MCLE programs designed to provide lawyers with first class instruction at a low, low price. Information on these programs, including these programs presented by David Cameron Carr:
Pretty Little Liars: Dealing with the Dishonest Client
Friday December 22, 2016 12 noon to 1 pm
There are few things more disheartening than when you find out your client lied to you. Or the court. Or someone else that matters. We will discuss ways to avoid being put in that situation and what to do when it happens to you.
Blurred Lines: Multi-jurisdictional Practice
Friday January 6, 2017 12 noon to 1 pm
21st century technology has shrunk the world. But a 19th century attorney regulation system still thinks that geography is destiny. Learn how lawyers who want to do business across state lines are dealing with the clash between them and the hazards of multi-jurisdictional practice.
Goodbye and Good Luck: Ethical Issues on Termination of Representation
Friday January 27, 2017 12 noon to 1 pm
Getting out is an important as getting in. When the attorney-client relationship goes bad, you have to know how to end it the right way. We will examine the rules on withdrawal, including securing court permission, avoiding foreseeable prejudice, and fulfilling your duties on fees and files.
These programs will take place at Downtown San Diego Law Library, 1105 Front Street, San Diego, CA 92101
Criminal Prosecutor’s “Joke” Involving Altering Evidence Merits One Year Suspension
In the Matter of Murray, Review Dept., State Bar Court, case no. 14-O-00412, filed 11/10/16.During plea discussions in a child molestation case,the Kern County prosecutor Robert Murray added two fabricated lines of testimony to the defendant’s transcribed statement that
made it appear that the defendant had admitted to having sexual intercourse with a 10-year-old child—an offense that carries a life sentence. He then transmitted the false document to the public defender. When confronted by the public defender nine days later, and despite several opportunities to correct the record, the prosecutor claimed it was all a joke. Charges against the defendants were dismissed after the “joke” came to light; the Kern County prosecutor chose to appeal that ruling, which was upheld on appeal. After trial in State Bar Court, the hearing judge found that the prosecutor was culpable of moral turpitude but only because he was “grossly negligent” in perpetrating a “joke gone bad.” He reccommended 30 days actual suspension. The Review Dept. also found moral turpitude but rejected the gross negligence theory and increased the discipline recommendation to one year of actual suspension. It also found that because the motion to dismiss was vigorously defended at trial and on appeal by the Kern County prosecutor, it was not unfair to afford the court’s findings on appeal “subtantial weight” and a presumption of correctness even though the prosecutor was not a party to the action.
Supreme Court Orders Special Assessment of $297 to Fund Discipline System
On November 10, 2016, the California Supreme Court issued an order assessing California lawyers at $297 fee to fund the operations of the State Bar discipline system. The Court rejected the State Bar’s request for funding for programs not directly related to the discipline system: the Commission of Judicial Nominees Evaluation, the Center on Access to Justice, and the California Commission on Access to Justice. Justice Elwood Lui was appointed as special master to oversee the expenditure of the assessment. The special assessment must be paid by March 1, 2017 under new California Rule of Court 9.9. Commentary at kafkaesq: The Supreme Court’s Sensible Shoes.
That’s Why They Call It Practice: Advance Conflict Waivers
The California Supreme Court has accepted review in the case of Shepard Mullin v. J-M Manufacturing, one of the most interesting decisions of recent years. One of the many issues presented by this case is the validity of the advance conflict waiver obtained by Shepard Mullin in its retention agreement with J-M. In the underlying facts, Shepard Mullin had undertaken to represent J-M while simultaneously representing a party adverse to J-M in a separate matter, the South Tahoe Public Utility District. The retainer agreement signed with J-M contained an advanced conflict waiver similar to the one in the fee agreement Shepard Mullin had with South Tahoe, purporting to allow Shepard Mullin to represent “currently or in the future represent one or more clients (including current, former or future clients) in matter involving [client]…by consenting to this arrangement [client] is waiving our duty of loyalty as long as we maintain confidentiality…” Advanced conflict waivers have become common, especially in larger law firms who operate at the national or international levels. These firms operate with many offices, hundreds or thousands of lawyers, and hundreds if not thousands of clients. The problem with advance conflict waivers is obvious if you look California’s Rule of Professional Conduct 3-310, which governs conflicts of interests: section (c) of the rule allows representation of conflicting interests only after receiving “informed written consent” which means advising the prospective client “of the relevant circumstances and of the actual and reasonably foreseeable adverse consequences to the client or former client” under section (a) of the Rule. How do you advise the clients of circumstances and the foreseeable consequences that flow from those circumstances before they occur? Despite this seeming impossibility, advance conflict waivers have been upheld in a handful of California cases, mostly cases involving disqualification under circumstances that are highly fact specific (see Zador Corp. N.V. v. Kwan, (1995) 31 Cal.App.4th 1285.) Shepard Mullin also involves a successful motion to disqualify but that isn’t the issue before Supreme Court, which is addressing the reversal of the judgment Shepard Mullin received after it filed a separate action to collect the balance of its fees after being disqualified.
It seems a perfect opportunity for our highest state court to make some new law on advance conflict waivers. There are also issues that could allow the Supreme Court to decide the case without addressing the advanced conflict issue, including the procedural history of the case which involved an appeal from an arbitrator’s award against J-M. The case has been fully briefed and we wait for oral argument.
Considering an advanced waiver in your fee agreement? Call me at (619) 696-0526.