Shot and Missed

Years ago, I represented a lawyer in a lawsuit against his former law partner. Our defendant had abused his law partners, stolen from the firm, and then tried to insult them during a settlement conference by suggesting that his cufflinks cost more than their entire wardrobes. After a weeklong trial, the jury returned a large verdict in our favor on a Friday afternoon. The former partner went out on Saturday, paid cash for a new car for his daughter and his wife, and then filed personal bankruptcy first thing on Monday morning. Really an awful human being!

My client was running out of money to continue this unrelenting against an attorney with no conscience but asked if I could continue to help him with an adversary proceeding in the bankruptcy court. He said that he would draft the pleadings—to save money—if I would review them and file them under my name. I agreed. Predictably, there were a lot of pleadings in a very short period of time.

One of them was a motion for sanctions against me. It seems that in one of the pleadings my client drafted for me to sign, he included in the certificate of service a long list of people who had business arrangements with his former partner but were not parties to the proceeding. My client had become so tired of this lawyer’s manipulation of the law and the courthouses that he decided to strike back by letting everyone know just what a jerk he was by sending them a copy of this pleading.

The bankruptcy judge was not amused and immediately issued a sanction against me—the only such order I have ever had in my career. I filed a motion for reconsideration and explained what had happened (my client drafted the motion, I proofed and signed it, but I did not proof the certificate of service) and the judge withdrew the sanction order against me. And I immediately withdrew.

I was reminded of that experience when I read Formal Advisory Opinion No. 05–10 from the Supreme Court of Georgia. The question presented was whether a Georgia attorney serving as local counsel for an out-of-state lead counsel (admitted pro hac vice on the motion of the Georgia lawyer) could be disciplined for discovery abuse committed by the lead counsel or by the out-of-state in-house counsel for the client. And the answer is (drum roll) . . . oh yeah, you betcha!

The Georgia court starts its analysis by stating that discipline of the local counsel would be limited to discovery abuse that is itself a violation of the Rules of Professional Conduct, such as destruction of documents subject to a motion to produce. The specific rule involved is Georgia Rule 5.1, “Responsibilities of Partners, Managers, and Supervisory Lawyers,” which in relevant part is identical to Texas Rule 5.01.

The predicate facts for imposing discipline on the local counsel are that the local counsel knows of the abuse and ratifies it by his or her conduct. Knowledge in this situation includes what the opinion calls “willful blindness.” Willful blindness exists if the local counsel was suspicious that lead counsel was engaging in or about to engage in a violation and then sought to avoid acquiring actual knowledge of the conduct. But the opinion considered it sufficient to show that local counsel sought to avoid actual knowledge if, in the presence of a reasonable suspicion, the lawyer made no further inquiry. In other words, evidence that establishes local counsel was or should have been suspicious may be enough to show knowledge through willful blindness.

The opinion acknowledges that evidence sufficient to show ratification is difficult to determine in the abstract. But the opinion then suggests that once knowledge is acquired, anything short of active opposition to the violation may be ratification. The appropriate conduct once knowledge of the violation is acquired, says the Georgia Supreme Court, would be withdrawal or—in some cases— disclosure of the violation to the court. In every case, according to the opinion, local counsel would be required to remonstrate with lead counsel and warn of local counsel’s ethical obligations.

The opinion only briefly references the possibility of contractually limiting local counsel’s supervisory obligations, so as to avoid the reach of rule 1.5. The opinion suggests that, even in the presence of such a contract, the court may understand the role of local counsel is carrying with it direct supervisory authority over out-of-state counsel, which is presumably the reason local counsel was retained.

There is an old saying that being shot at and missed is not the same as never having been shot at. After my experience described above, I can tell you that is true. Keep that in my next time you are asked to serve as local counsel.