98th Installment. The California State Bar seeks new oppressive pleading allowances—and the defense bar pretends to object

The official California State Bar “defense bar” bemoans the recently proposed formal curtailments of respondents’ right to explicit prosecutorial pleading, but in practice the bar court long ago abandoned its formal pleading rules. (State Bar Rules of Procedure, rules 101(b)(2) & (3).)  The defense establishment doesn't know because for years the official bar-defense attorneys have allowed prosecutors license in their vague charging allegations. Let any State Bar defense attorney name a case where they filed a motion to dismiss because the allegations failed by standards the Supreme Court repeatedly demanded that pleadings disclose not just the violated rule and the violating conduct but the manner in which the conduct violates the rule. (See Baker v. State Bar (1989) 49 Cal.3d 804 and predecessor cases.)

The bar court effectively repealed the pleading requirements because the bar-defense establishment had ceased raising them after the California Supreme Court tired of repeating itself and then drifted to authoritarianism. Granting prosecutors license has become part of the defense establishment’s grand bargain: preferential treatment for not rocking the boat. Because of its inexperience with real cases—those made real by challenging the State Bar’s central allegations rather than quibbling for a better bargain—the defense bar can’t even say what’s wrong with the expansion of the state bar’s pleading powers. The State Bar’s Chief Trial Attorney argues that it can restrict the rights of respondents to the bare necessities of notice pleading as practiced in criminal law, and the defense bar responds that this exemplifies the trend toward fewer respondent rights: “Brick by brick, procedural protections for  respondents in the discipline system are being dismantled.” But noticing a trend doesn't even rise to the level of counter-argument; it may even help justify. Noting a trend is the best the defense bar can do when it tries to muster an argument: no wonder it never dared argue for dismissal based on inadequate pleading!

Yet the argument that the new pleading rules are oppressive and illegal is straightforward. The Notice of Disciplinary Charges differs from criminal charges in the crucial respect that the answering party must affirm or deny each of the facts the State Bar pleads. The NDC isn’t just a pleading tool; it rolls pleading and discovery functions into one procedure. To require no connection between fact and charge violates respondents’ right to privacy under the California constitution by inviting arbitrary fishing expeditions. Even more importantly, to require answers to loaded questions, a State Bar norm, violates due process.                                

kanBARoo Court, 10th Installment. Law Practice or Law-Business

The State Bar's Notice of Disciplinary Charges intertwines without distinguishing two broad issues. The first is my administrative service contract's lawfulness. The second is my ethical responsibility for the fraud the service's staff perpetrated. The State Bar alleges that I am responsible for the fraud because it resulted from the arrangement's impropriety. The State Bar also alleges that I am strictly liable in ethics for the misdeeds of my staff. These Installments have considered strict liability in ethics and will focus on this important issue again, but legally, strict liability in ethics is a nonstarter for the State Bar.

I didn't anticipate staff fraud, yet I anticipated that my manner of contracting would collide with the State Bar. The relevant question: is an administrative services general contract unlawful? If the contract was lawful, charges that the contract facilitated the fraud do not state disciplinary charges, even if the contract increased those consequences' likelihood. I have the right to rely on my partners in contract following the law, provided I have taken reasonable care.

The Notice of Disciplinary Charges alleges that I formed a partnership contract for the practice of law with nonlawyers. Much of the NDC depends on this allegation. The NDC alleges that I contracted with persons defrauded by staff, "through staff." These defrauded persons were unknown to me, and I did not direct, approve or ratify the fraudulent staff practices. The theory that I operated "through staff" requires that staff function as my agent. General partners bear the requisite reciprocal agency relationship, although only in a civil context. I am not liable, even civilly, for the torts of my staff committed outside the scope of employment, but I would be civilly liable for the torts of my general partner undertaken in the name of the partnership.

The State Bar has ignored that my contract does not meet the statutory definition of a partnership. To state the best argument, where the State Bar itself supplied none, they might argue that the contract substantially satisfied the definition of a partnership agreement. A law governing law partnerships might hold only certain aspects of partnership strictly essential to the definition. Applying the criterion depends on distinguishing the primarily relevant partnership factors for the practice of law. The problem can also be approached from the opposite side. What disadvantages go with restricting the practice of law to forbid various quasipartnership agreements? To see the disadvantage of restriction is to see the case for narrowing the concept of partnership applied to law.

Traditional law practice, sanctioned by a broad antipartnership law, fills all three roles with lawyers: legal, administrative, and entrepreneurial. The condition restricts the small law firm more: in solo practice, one attorney must fill all three roles. How much legal talent is wasted where the lawyer lacks the other skills or aptitudes? How many incompetent lawyers do we suffer because, to get entrepreneurial talent, you often must sacrifice legal talent?

The conventional answer to this problem is that the legally talented, nonadministrative, non-entrepreneurial lawyer should become the employee or associate of a lawyer with the full panoply of skills. This is no solution; it means the best legal thinking is not in charge of cases' conduct. To get to the top, attorneys need a mix of the other talents, each in approximately equal proportion, leaving numerous low-legal attorneys in control of offices. The pseudosolution of hiring expertise leaves the actual control and ultimate responsibility for prosecuting and defending cases to some legally unable attorneys. My administrative services contract—delegating administrative and entrepreneurial responsibilities—created a service-delivery super-standard for a client community. The State Bar hates this kind of contract. In this, the State Bar freezes a status quo of 'law as business.'

Tight restriction of lawyers' quasipartnership agreements harms the profession in other ways. When a lawyer who actually controls an office must be a lawyer and a businessman, law becomes as much a business as a profession. The traits that inherently mark the businessman rather than the lawyer proliferate among the profession. Many of the disagreeable characteristics of lawyers owe to the personalities of businessmen. Businessmen want to be bosses — to boss other people around. The administrative side of the law office is the side where you order people about, hire them, and fire them. Often, power-hungry people aspire to this station.

The unity of law/administration/entrepreneurship, ensconced in a broadly interpreted anti-partnership law, inescapably picks a particular template for the lawyer personality. The profession should not foster this alien template, as essence or public appearance.

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• If you are interested in the story, the legal issues it raises, or its conclusions, keep reading my (at least) thrice-weekly installments.
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kanBARoo Court. 8th Installment. Reply to Critics: An Overview

To be resolved properly, legal issues must be debated. Since little real controversy seeps into the California State Bar Court, I have tried to develop controversy on this blog. In further pursuit of controversy, I posted the 7th installment on the newsgroup misc.legal. Two attorneys responded, although they did not answer my invitation to post their comments to the blog. The thread is at http://tinyurl.com/2zaea3 Without taking unauthorized liberties by direct quotation, I shall deal here with those arguments going to merit.

I asserted that procedural issues concerning notice and due process were at the heart of my case. One poster said the merits of the State Bar's allegations were central. The distinction here is between "my" case and the State Bar's case. More substantively, the poster believes that the nature of the State Bar’s allegations (see 3rd Installment) is clear. The poster agreed with me on the pure question of law that conclusory allegations were insufficient to state a disciplinable offense.

The State Bar alleges that I misappropriated client funds. I maintain that staff members perpetrated fraudulent acts, but the misappropriation occurred without my knowledge, approval, or ratification and despite my supervisory efforts. The Deputy Trial Counsel and other State Bar officials maintain in correspondence that the attorney is liable for the acts of his staff. I would be happy to resolve this issue as a matter of law. It is crystal clear that the State Bar is wrong on the legal cognizability of strict ethical liability.

The State Bar knows it would lose taking a straightforward approach. The State Bar has oppressed many attorneys through its dogma of strict ethical liability. The Bar's successful history prosecuting under a legal theory unapproved by any court has made it arrogant in its private construals of law, but not so arrogant as to base a case on interpretations so jurisprudentially anomalous.

Instead, the State Bar Court's Office of the Chief Trial Counsel alleges that I performed the acts in question "through" various staff members. The Bar's formula is vague and conclusory with respect to the key issues, such as how did I engage and cheat those defrauded, "through" these staff members. Is the Bar saying what it believes, that I committed fraudulent acts, as a matter of law, because my staff did? Then their notice of disciplinary charges should state this legal theory, and it should not leave open the competing interpretations.

On its face, my committing acts of misappropriation through staff members would mean I instructed the staff members to engage the clients and misappropriate their money. But the State Bar refuses to state its meaning with particularity, by alleging that I instructed the staff members, had knowledge of their fraudulent conduct, or ratified it. An intermediate meaning sometimes mooted would hold I acted with gross negligence in failing to supervise my staff. If the State Bar so alleged with particularity, it would lose, as I can prove my active regard for securing funds my office received.

This failure to allege the charges with particularity characterizes the State Bar's quotidian functioning. It means one thing, states another, and hopes it can discover evidence of what it does not state. The State Bar misuses the notice of disciplinary charges to license a fishing expedition. It can support only its delusion-based theory that a lawyer is strictly liable in ethics (not civil controversy, remember) for the acts of the attorney's staff, but it refuses to state the theory and expose it to refutation.

This incompetent and oppressive pleading style allows the State Bar more than its fishing expeditions. It gets voluntary convictions and even resignations. Since the State Bar avidly tells respondents its private theories, most lawyers accept their guilt, based on an unlawful unpled theory. These attorneys compromise their cases, based on the State Bar theory of strict ethical liability. My defense stands for exposing and discrediting this deceptive and oppressive pleading practice.

Moving now to the comments of the other poster, he advises me to get rid of the blog, because of the self-defeating admissions it contains. I admit potentially damaging facts. Deleting the blog would be futile, because the blog merely quotes what I already filed. The poster is referring to a paragraph from my motion to dismiss the notice of disciplinary charges, quoted in the 3rd Installment, where I state:

Respondent hoped to test in practice his theoretical ideas concerning the effective delivery of legal services to non-mainstream cultures. If necessary, the enterprise would also test respondent's interpretation of rule 1-310 of the Rules of Professional Conduct, because of the contractual terms on which respondent ventured. J.B. Kim agreed to fund and staff the office operations and provide a skilled negotiator. Kim would report directly to respondent, and respondent would have ultimate control of the office and complete control of the practice of law within it. Respondent, viscerally averse to the mechanics of financial management and effectively incompetent in their execution, sought to delegate the operational responsibility for keeping the books, while maintaining a robust system to monitor Kim’s compliance.

The poster says that I admit I was a name for hire and unable to manage the law office. The "name for hire" is unsubstantiated and false, because I supervised the legal operation of the office and prosecuted my clients' cases. My financial-management incompetence is indeed an admission, made because I do not want to play a procedural game, even though in such a game, played against the California State Bar, I should expect to prevail. When some defrauded persons wrote me, I informed them that while I denied responsibility for their loss, they might have a cause of action against me for negligent staff supervision. But the Bar does not allege negligence. While a civil case so based might possibly be tenable, my financial ineptitude and my failure to appraise it or its implications accurately is not subject to State Bar discipline.

• If a particular aspect interests you, and you want to hear more, do not hesitate to comment. No registration is required, and I will not censor comments.
• If you are interested in the story, the legal issues it raises, or its conclusions, keep reading my (at least) thrice-weekly installments.
• If you like the legal theory, my writing, or want to know more about what services I provide for litigation and trial attorneys, see My Profile.

kanBARoo Court, 7th Installment, My Defense in a Nutshell

The gravamen of my defense before the California State Bar Court is that conclusory notice of charges is insufficient to meet the pleading requirements of the State Bar Court's Rules of Procedure. (Rules Proc., rule 101(b)(2) & (3).)

My case's procedural form can conceal the core issue, right to notice, as a matter bearing on high policy, not only individual cases. If my experience is typical—and why should it not be, absent legal obstacles to deter the State Bar Court—then the modus operandi of the State Bar is to file the most general allegations, with no showing of how particular alleged infractions violate the rule or statute in question. The Office of the Chief Trial Counsel then launches a fishing expedition, where the respondent has protection inferior to that afforded in ordinary civil or criminal matters. This conduct defeats the purpose of initial pleadings and formal charges.

My case rests on two foundational premises, establishing pleading requirements in the California State Bar Court:

1. The California Supreme Court reprimanded the State Bar Court in a line of cases. (See 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 (1989) 49 Cal.3d 804 ; Maltaman v. State Bar (1987) 43 Cal.3d 924, 931; and Guzzetta v. State Bar (1987) 43 Cal.3d 962, 968.). The Supreme Court offers commentary comical in its seeming futility. In each opinion, the Supreme Court inserts a frustrated remonstrance: "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."
2. The general rules of pleading that underlie the State Bar's Rules of Procedure are committed on principle to factual pleading.

The Supreme Court warned repeatedly that the State Bar provides insufficient notice when it fails to connect law and wrongful conduct. Yet, the theory has not been used by any previous respondent. The failure to apply the law after it has been set out points to the extremely low level of practice in State Bar Court defense. These installments discuss the causes.