The argument in this motion for reconsideration provides less insight into the controversy's legal essence than the motion to dismiss, but it is also simpler, more direct, and based in on-point authority. I don't think a judge could reasonably deny it. Initially, the only repercussion suffered by the State Bar would be having to file a revised notice of disciplinary charges.
Stephen R. Diamond (State Bar No: 183617)
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The State Bar Court
Hearing Department - Los Angeles
In the Matter of
Stephen R. Diamond,
No. 183617
A Member of the State Bar
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Case Nos. 05-0-04605 et al.
Motion to Reconsider Order Denying Motion to Dismiss
(Date Order Filed: August 17, 2007)
(Rules of Procedure, rule 224)
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Grounds
1. Issue
The Hearing Court exonerated the NDC because the evidence it alleges would prove the offenses. The NDC must not only provide evidence for the charges and designate the violated enactment but must also state the manner in which the alleged conduct violates the enactment. Should the Hearing Court reconsider its order denying the motion to dismiss, because the NDC fails throughout to allege the manner in which petitioner’s conduct violates the enactment?
2. The court’s error of law is the basis for the present motion
This motion is based on Rules of Procedure, rule 224(b)(2), which permits motions for reconsideration where petitioner believes the court has made an error of law.
The grounds for a motion for reconsideration are (1) new or different facts, circumstances or law, as that ground is applied in civil matters under Code of Civil Procedure section 1008; and/or (2) the order or decision contains one or more errors of fact and/or law based on the evidence already before the Court.
The Hearing Court erred in basing its denial on the following statement of law:
The facts alleged in the NDC, if proven, would constitute disciplinable offenses. The appropriate time for respondent to present them will be at the hearing on the merits.Petitioner maintains that the above is an incorrect statement of the law because it contradicts governing Supreme Court holdings. The holding of this court is that the allegations alleged suffice because the allegations, if proven, would establish a disciplinable offense. The Supreme Court, however, has repeatedly held that the NDC must include not only a description of the offending conduct and the enactment it violates, but also the manner in which the conduct violates the enactment. A typical Supreme Court holding in this line of cases is:
Once again we are constrained to call to the attention of the State Bar Court the importance of identifying with specificity both the rule or statutory provision that underlies each charge and the manner in which the conduct allegedly violated that rule or statutory provision. While petitioner here does not complain of any due process violation in lack of notice, this specificity is also essential to meaningful review of the recommendation of the State Bar Court. [Citations.](Baker v. State Bar (1989) 49 Cal.3d 804, 816.)
The Supreme Court holds that each charge must contain a description of the manner in which the alleged conduct violates the enactment, not only for proper review but also to afford the California due process rights that grant sufficient notice of charges.
3. Other considerations warrant reconsideration
A. The court misapprehended petitioner’s basis for the motion to dismiss.
Petitioner based nothing on the “Statement of the Case” in petitioner’s pure legal argument for dismissing the NDC. The court apparently thought petitioner was making an argument based on extrinsic facts.
B. Petitioner has subsequently located substantially stronger authority than that previously cited.
This motion for reconsideration contains law unknown to Petitioner at the time of filing the Motion to Dismiss. This law supports petitioner's argument more strongly and directly than cases previously cited. The law includes Lipson v. State Bar (1991) 53 Cal.3d 1010, 1016; Sugarman v. State Bar of California (1990) 51 Cal.3d 609; Baker v. State Bar of California (1989)al.3d 804; Maltaman v. State Bar (1987) 43 Cal.3d 924, 931; and Guzzetta v. State Bar (1987) 43 Cal.3d 962, 968. In these cases, the Supreme Court clarifies this requirement for pleading the manner in which the offending conduct violates the statutes or rules.
The due process requirements for the State Bar Court are those either contained in the Rules of Procedure or those comprising the general rules of due process. The requirements for pleading are treated at Rules of Practice, rule 101. These rules are due process rules because they relate to notice, notice being perhaps the most general rule of due process.
1. The NDC must link alleged conduct and enactment to state a disciplinable offense
Contrary to the contentions of the State Bar and of the State Bar Court, merely reciting the evidence that would prove the violation does not suffice to state a disciplinable offense. Rather, the charges must contain a valid explanation linking the alleged conduct to the allegedly violated enactment. As the Supreme Court voiced its frustration with this pleading issue[1]:
Once again we are constrained to call to the attention of the State Bar Court the importance of identifying with specificity both the rule or statutory provision that underlies each charge and the manner in which the conduct allegedly violated that rule or statutory provision. While petitioner here does not complain of any due process violation in lack of notice, this specificity is also essential to meaningful review of the recommendation of the State Bar Court. [Citations.](Baker v. State Bar (1989) 49 Cal.3d 804, 816.)
The Supreme Court restated this admonition in Sugarman v. State Bar of California (1990) 51 Cal. 3d 609, 618), and it had predecessors in Maltaman v. State Bar (1987) 43 Cal.3d 924, 931 and Guzzetta v. State Bar (1987) 43 Cal.3d 962, 968.
A. The effect of the omission is pervasive
The failure to plead the manner in which the alleged conduct violates a specific statute infects the entire complaint. In no count does the State Bar make the required linkage.
While the omission is pervasive, and charges must always be alleged with specificity, the courts have provided additional guidelines to which allegations must conform. In other instances, what information is necessary for the parties to provide can be determined from the complaint as a whole. Here, case law has established requirements for alleging aiding and abetting, as a matter of general due process. The need to allege how the client relationship was established can appear from the case as a whole.
B. California due process requires pleading and proving scienter for aiding and abetting.
The argument is straightforward. The NDC must allege offenses factually and specifically. The courts have held that aiding and abetting necessarily involves scienter. Thus, factual pleading must include pleading all the elements of aiding and abetting. Failing to plead scienter leaves unstated the actual link between alleged conduct and rule violated. Not to allege knowledge of purpose is to leave the linkage unstated, as admonished against by the Supreme Court, because scienter[2] is part of the necessary explanation of the manner of violation of the enactment.
C. The case requires pleading formation of an attorney-client relationship.
Any sufficiently informative explanation of how the conduct here alleged violates statutes or rules cannot avoid expressly alleging the formation of a client-attorney relationship with Defrauded Persons[3]. The enactments petitioner allegedly violated are often statutes designed to protect clients. The NDC admits the indirect formation of the attorney-client relationship. Because of this at-most indirect formation of the attorney-client relationship, the manner the alleged conduct violates the enactments cannot be explained without factually pleading the relationship’s manner of formation. That is a necessary part of the chain of explanation.
2. Responding to the State Bar’s Opposition to Motion to Dismiss further clarifies the issues.
Respondent State Bar made several arguments in the State Bar's Opposition to the Motion to Dismiss that are relevant to the motion to reconsider.
A. Literal pleading of all the elements expressly stated by statute does not guarantee stating a disciplinable offense.
The State Bar argued that since Rules of Professional Conduct, Rule 1-300(A), does not include scienter as an element, it is unnecessary to plead it. Pleading requirements often derive from case law. If the law in question is statutory rather than codified common law, it must always be pled specifically. Insofar as the statutes reference common law concepts, these must be pleaded with full specificity too.
As applied to the aiding and abetting charges, The State Bar argues:
With that general background pled, each of counts one, seven, seventeen, and twenty-one, plead that a client employed Respondent, through Kim and staff, to represent him/her in a legal matter… Respondent may choose to argue in his defense that he did not know Kim and his associates were engaged in wrongful conduct, all that is required to plead the charge is Respondent's willfulness in aiding another person or entity in the unauthorized practice of law.While the State Bar announces that the pleading is sufficient, it supplies no authority in support. The authority for the alternative view espoused by petitioner derives from these propositions:
· The NDC must be pled specifically and factually (See Lipson v. State Bar (1991) 53 Cal.3d 1010, 1016);
· Specific and factual pleading of aiding and abetting in California includes scienter. (People v. Tillotson (2007) __Cal.App.4th__).
B. Different forms of contract makes specific allegation more important, not less important.
The State Bar points out that various manner of contracting is possible, an observation that actually supports petitioner's argument. The Supreme Court has pointed out that the manner in which the conduct violates the enactment must be specified. If the State Bar responds that there are various manners of contracting, then it must explain which manner of contracting it alleges of petitioner. In what manner did petitioner form a contract with Defrauded Persons, whom the State Bar designates 'Clients'?
C. More is needed than the facts proving an offense.
The State Bar argues that the facts alleged suffice to convict, hence are sufficient to state a disciplinable charge. These papers have already treated this issue.
D. The State Bar has not properly alleged petitioner’s formation of a partnership with a non-lawyer.
Petitioner established that the State Bar has not properly alleged partnership with a non-lawyer. The allegations simply do not correspond to the definition of “partnership” in California. This controversy was not the subject of any commentary in the court order. Even if the State Bar Court decided this was the only error in the NDC, the court should have granted the motion to dismiss under accepted procedures. (See In re McCarthy (2002) No. 96-O-00528 [Motion to dismiss NDC can apply to a single count].)
Conclusion
The legal issues are difficult because of the amorphousness of State Bar Court pleading requirements, which have not been subject to extensive construal, despite some patent ambiguities.[4] The court should resolve the legal issues properly. The court should not delay resolution until the hearing on the merits. The court should not require petitioner to face charges that fail to state disciplinable offenses.Dated:______
By:
Legal Research & Writing Service
Stephen R. Diamond
[1] This issue is identical in substance to petitioner’s argument in the Motion to Dismiss that the NDC should allege ultimate facts. This formulation uses different terms of art, here, terms of art used by the most dispositive authority.
[2] Henceforth, “scienter” will be employed as shorthand for specific knowledge of the perpetrator’s purpose.
[3] Shorthand adopted in Motion to Dismiss for individuals defrauded by Kim and Shin.
[4] The text of Rules of Procedure, rule 262, does not reveal, for example, that a motion to dismiss can be directed against specific counts.
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