Series on Discipline Procedures. Several of my blogs in 2015 addressed dealing with ethics complaints. I intend to write more blogs on this subject, with a view to collecting and supplementing them as an online booklet.
This blog deals with a common and important stage in discipline enforcement –stipulations for discipline or dismissal. Two recent cases – In re Riehm and In re Olson - make the subject timely. Riehm deals with conditional admissions, piecemeal stipulations and stipulations that fudge crucial facts. In re Riehm, 2016 WL 4051508 (Minn. July 27, 2016).
Olson is remarkable for the position taken on a fundamental matter – whether a violation of the Rules of Professional Conduct is a necessary predicate for discipline - by the Office of Lawyers Professional Responsibility (OLPR). After trial, a Supreme Court referee concluded that OLPR failed to prove any alleged rule violation by Olson. Because no appeal was taken, the referee’s conclusions became “conclusive.” OLPR nonetheless prepared a stipulation by which Olson was asked to state her understanding that the Supreme Court could dismiss or could impose any discipline or other disposition it chose. When Olson objected, OLPR stated that no rule violation was needed for discipline. OLPR ultimately withdrew the offending paragraph but affirmed its basic position.
Public Disciplines By Stipulation - Standard Practice. The great majority of public disciplines of Minnesota lawyers are imposed, by the Supreme Court, based on stipulations between respondent lawyers and OLPR . Almost all stipulations use boilerplate provisions. Respondent admits the facts and admits that the conduct violated specified Rules of Professional Conduct. The stipulation recommends a certain discipline, but the respondent acknowledges the Court may order any of the dispositions – from disbarment to dismissal - available to the Court under Rule 15(a), R. Law. Prof. Resp. (RLPR). In drafting stipulations, OLPR is mindful that its main duty is to inform the Court of what OLPR believes to be the facts of the matter, as they can be proved by clear and convincing evidence.
Supreme Court Procedures and “Some Deference” to OLPR. Most often, the Court adopts the stipulation and imposes the recommended discipline. In recent years, however, the Court has increasingly ordered the parties to file briefs, explaining how the recommendation fits the facts and precedents. These orders often ask why the Court should regard the recommended discipline as sufficiently severe. After briefing, and sometimes after oral argument, the Court usually imposes the recommended discipline. However, in some cases, the Court imposes a more severe discipline than that recommended.
In considering stipulations, the Court gives “some deference” to OLPR, because OLPR is “in the best position to weigh the cost and risk of litigation and to determine when a stipulated discipline will best serve the interests of the [Lawyers Professional Responsibility] Board.” In re Riehm, below.
Private Disciplines. In most private disciplines, OLPR issues an admonition, for isolated and non-serious misconduct, and the matter becomes final when the respondent attorney does not appeal. Private probations are entered into by stipulation, approved by the Board Chair or Vice-Chair. Rule 8(d)(3), RLPR.
In re Riehm - Try, Try Again. The Minnesota Supreme Court rejected the first stipulation for discipline submitted by attorney Michael Riehm and OLPR, because it covered only one of Riehm’s two rule violations. The Court rejected a second stipulation because it fudged on whether the misconduct admitted by Riehm was intentional. Before the Court adopted the discipline recommended in a third stipulation, suspending Riehm for five years, Riehm tried, belatedly and unsuccessfully, to make his admissions conditional on acceptance of the recommended disposition.
Riehm – Stipulation #1. Riehm was involved in a dishonest scheme to obtain low-level cases from a lawyer at TSR, a prominent personal injury firm. Riehm’s conduct violated both the fee-splitting rule, 1.5(e), and one of the honesty rules, 8.4(c). A Lawyers Board panel found the Rule 1.5(e) violation warranted only private discipline and directed OLPR to file a petition for disciplinary action, alleging only the Rule 8.4(c) violation. OLPR and Riehm promptly submitted a stipulation covering only Rule 8.4(c). On appeal by the complainant, TSR, the Court rejected the stipulation as piecemeal. The Court held that the Panel should have authorized a petition that would allow the Court to consider all related misconduct together, especially because there was one course of misconduct. In re Petition for Review of Panel Decision Against Respondent, Panel Case No. 35104, 851 N.W.2d 620 (Minn. 2014). OLPR filed an amended petition, alleging both the Rule 1.5(e) and Rule 8.4(c) violations.
Riehm – Stipulation #2. Riehm and OLPR filed a second stipulation. However, this stipulation fudged on whether Riehm had knowingly assisted M.M. in the case-transfer scheme. Upon order, the parties submitted briefs, disputing whether Riehm acted dishonestly. The Court rejected the stipulation. The Court has long required that stipulations avoid fudging on crucial facts, especially whether misconduct was intentional. In 1984, a special Supreme Court rejected a stipulation between Justice John Todd and the Board on Judicial Standards, stating, “In view of Justice Todd’s denial of ‘any intention to cheat or take unfair advantage of other persons taking the bar examination,’ a fact determination of intent is essential to a proper resolution of this matter and can only be accomplished by a full evidentiary hearing.” In re Todd, 359 N.W.2d 24 (Minn. 1984). Findings regarding intent and knowledge are often crucial to determinations in discipline matters.
Riehm –Stabbing and Stipulation #3. Eleven months before Stipulation #2, Riehm stabbed a man and was charged with first-degree assault. Six months after Stipulation #2, Riehm was sentenced to a year in the workhouse. Thereafter, Stipulation #3 was reached, on the record before a Supreme Court referee, appointed to hear all charges against Riehm. With the advice of counsel, Riehm admitted all charges on the record and agreed with OLPR that a five year suspension was the appropriate discipline. However, when OLPR sought to incorporate the terms in a signed writing, Riehm attempted to make his admissions conditional on the Court’s imposing the recommended suspension. The referee rejected Riehm’s gambit and joined in recommending the five-year suspension to the Court.
Riehm - Conditional Admissions Prohibited. Conditional admissions have not been allowed by rule in Minnesota since a 1988 amendment to the rules. Rejecting Riehm’s arguments, the Court held, “as a matter of law, an attorney may not condition his or her admissions to allegations of professional misconduct on receiving a specific disposition from our court.” The Court explained, “A conditional admission to allegations of professional misconduct violates the principles of truth and candor fundamental to the purpose of attorney discipline proceedings. By conditioning an admission on receiving a particular form of discipline, an attorney creates the perception that the admissions made may or may not be truthful. To allow the practice of conditional admissions would, therefore, cast doubt on the integrity of the attorney discipline process.” Id. at *7. This holding obviously requires that a lawyer who wishes to enter into a stipulation for discipline must admit allegations without conditions.
If the lawyer cannot persuade OLPR it has erred, the lawyer has few alternatives. If the disputed factual statement relates to a minor matter, the respondent could request that the stipulation recite what the Director alleges and the respondent denies. However, if the statement has significance, a dispute may signify to the Court that, as in Riehm and Todd, the parties’ controversy precludes discipline without prior resolution of the controversy.
In re Olson - Public Discipline After Conclusive Finding of No Rule Violation? A very recent matter, concluded by the Supreme Court’s order of dismissal, reveals a remarkable position taken by OLPR in negotiating a stipulation for dismissal. OLPR claimed that the Supreme Court’s “plenary” authority includes the authority to discipline a lawyer notwithstanding that, after trial, the court’s referee has concluded the lawyer did not commit any violations of the Rules of Professional Conduct, and that conclusion has become “conclusive” because neither party appealed. In re Olson, File No. A16-0280, Order for Dismissal, Sept. 9, 2016.
After trial and briefs, a Supreme Court referee concluded that the respondent attorney, Olson, did not commit the ethics rules violations that OLPR alleged in its Petition for Disciplinary Action. The referee recommended dismissal of the petition. Neither OLPR nor Olson appealed. Therefore, the referee’s findings and conclusions became “conclusive.” Rule 14(e), RLPR. Olson was represented by the author and by Dorsey & Whitney.
OLPR drafted a stipulation for dismissal to present to the Supreme Court. OLPR’s draft stipulation included a provision, “The Director and respondent stipulate that the referee’s findings of fact and conclusions of law are conclusive.”
OLPR’s draft included a statement that is suitable boilerplate for stipulations for discipline, but is out of place in stipulations for dismissal, “Respondent understands that based upon this stipulation, this Court may impose any of the dispositions set forth in Rule 15(a)(l)- (9), RLPR, including making any disposition it deems appropriate.”
Rule 15(a) includes nine dispositional options ranging from disbarment, to probation, to dismissal, to “such other disposition as this Court deems appropriate.” A fair paraphrase of OLPR’s draft would be, “Upon a stipulation that it has been conclusively determined that respondent did not violate any rule, the Supreme Court may choose any disposition, from disbarment to dismissal.”
Through counsel, Olson objected, on the basis that the Court did not have the authority to impose disciplinary dispositions, such as disbarment or probation, without any admission or finding of rule violation, and indeed after a “conclusive” determination that no rule was violated.
OLPR’s reply is quoted here verbatim, to ensure understanding of OLPR’s position.
We don’t agree that the language of the stipulation for dismissal needs to be modified. Rule 15(a)(7), RLPR, provides that the court may “make such other disposition as this Court deems appropriate,” which would appear to give the court discretion to do whatever it deems appropriate given conclusive findings and conclusions from the referee. This discretion would presumably not be subject to limitation, even by agreement of the parties. Even with a conclusive finding that no violations of the MPRCs occurred the court could, for example, order the lawyer to take the professional responsibility examination, place the lawyer on probation, dismiss the petition and seal the file, etc. A finding of discipline would not appear to be a predicate to those dispositions. Because of this, we believe it would be inappropriate not to advise respondent of the court’s discretion, though unlikely given the procedural posture.
(Emphasis added.)
Through counsel, Olson renewed objection. Counsel emphasized four points. (1) Constitutional due process protection prevents the Court from imposing discipline after conclusive determination of no rule violation. (2) The ABA Model Rules for Lawyer Disciplinary Enforcement expressly require a finding or admission of misconduct before discipline may be imposed. (3) OLPR was not merely “advising respondent,” but was demanding that respondent agree to state, as a common understanding, that the Court could impose discipline without a rule violation. (4) OLPR’s position was astonishing, unprecedented and obviously unconstitutional.
Olson’s counsel stated that Olson would not sign a stipulation with the offending paragraph, but would proceed by motion if OLPR was insistent. OLPR replied that the paragraph in question was merely “designed to advise a respondent of the plenary authority of the Court.” OLPR thereby apparently rejected Olson’s claim that the Court’s authority was constitutionally limited, rather than being “plenary.”
OLPR agreed, however, that the paragraph could be deleted. A stipulation was signed and submitted to the Court. The Court ordered the petition dismissed.
This account of OLPR’s position on stipulations for dismissal is included here because, to this author, OLPR’s position that the Court could order probation (or disbarment) of a lawyer as to whom it was “conclusively” determined there was no rule violations remains astonishing, at odds with Minnesota precedent, and obviously unconstitutional. This controversy provides an occasion for restating certain principles that are fundamental to the attorney discipline system.
Minnesota Law – Rule Violation Required for Discipline. The Minnesota Supreme Court has held, “an attorney will not be subject to discipline unless there is clear and convincing evidence of conduct that violates the Minnesota Rules of Professional Conduct.” In re Panel File 99-42, 621 N.W.2d 240, 245 (Minn. 2001). The 99-42 case arose when OLPR issued an admonition to a lawyer, alleging violation of a Lawyers Board opinion. OLPR did not allege a rule violation. The Court dismissed the admonition, because no rule violation was alleged or found.
Similarly, the Preamble to the Rules of Professional Conduct states that the rules which use “shall” or “shall not,” are those which, “define proper conduct for purposes of professional discipline.” Throughout the procedural Rules on Lawyers Professional Responsibility, the terms “professional conduct” and “unprofessional conduct” are used as predicates for investigation, discipline, etc. For example, as to a petition for disciplinary action, such as that in Olson, it is required, “The petition shall set forth the unprofessional conduct charges.” Rule 12(a), RLPR. Obviously, when it is “conclusively” found that a lawyer did not commit alleged unprofessional conduct, she may not be disciplined.
Constitutional Protections – Judicial Finding of Misconduct Required for Discipline. The United States Supreme Court has long recognized that attorneys “hold their office during good behavior, and can only be deprived of it for misconduct, ascertained and declared by the judgment of the court, after opportunity to be heard has been offered.” Ex Parte Garland, 71 U.S. (4 Wall.) 333, 378 (1866) (citations omitted). The Court explained, “The attorney and counsellor being, by the solemn judicial act of the court, clothed with his office, does not hold it as a matter of grace and favor. The right which it confers upon him to appear for suitors, and to argue causes, is something more than a mere indulgence, revocable at the pleasure of the court, or at the command of the legislature. It is a right of which he can only be deprived by the judgment of the court, for moral or professional delinquency.” Id. at 379.
In the era before the Court expressly adopted an express code or rules as standards of conduct for lawyers, it nonetheless imposed discipline. During this time, the Court based its disciplines on violations of the attorney oath or on professional standards that were well known. The Court declined to adopt the ABA Canons of Professional Conduct, but cited the Canons as of “great weight” in setting discipline standards. In re McDonald, 204 Minn. 61, 71, 282 N.W. 677, 682 (1938). The Court also set discipline standards only prospectively when there was doubt about applicable standards. In re Greathouse, 248 N.W. 735 (Minn. 1933). However, these cases were based on the discipline authority charging specific conduct as unprofessional and proving the alleged unprofessional conduct by clear and convincing evidence.
As the citation above to Panel File 99-42 shows, the Minnesota Supreme Court has clearly held that the “professional delinquency,” for which a lawyer may be disciplined involves a due process determination that an attorney has violated the Rules of Professional Conduct. As the Court has said, “To implement our duty to regulate the legal profession, we adopted a code of professional responsibility.” Minneapolis Star & Tribune Co. v. Hous. & Redev. Auth., 310 Minn. 313, 319, 251 N.W.2d 620, 623 (1976). The “plenary” authority OLPR ascribes to the Court is limited by lawyers’ rights to their licenses and to due process protection for deprivations of those rights.
The Court’s positions are anchored in constitutional due process protections. For nearly seventy years, a lawyer’s constitutional right to due process protections in lawyer discipline has been recognized in Minnesota. In re Rerat, 28 N.W.2d 168, 172 (Minn. 1948). Applications of Rule 15(a), RLPR, are subject to due process scrutiny. Due process requires the “opportunity to be heard at a meaningful time and in a meaningful manner,” State v. Krause, 817 N.W.2d 136, 145 (Minn. 2011) (citing Mathews v. Eldridge, 424 U.S. 319, 335 (1976)). A hearing before a referee would not be “meaningful” if the referee’s “conclusive” determination that no ethics rule was violated could be superseded can be followed by the Court’s imposing discipline.
Due process is violated when the discipline authority adds a charge after the hearing and when the Court’s referee finds misconduct on rule violations not charged in the petition. In re Ruffalo, 390 U.S. 544 (1968); In re Hetland, 275 N.W.2d 582 (Minn. 1978). The Court is as constitutionally subject as discipline authorities are to these due process prohibitions on after-the-fact disciplinary action.
ABA Model Standards are in accord with Panel File 99-42 and at odds with OLPR’s positions. “These standards are designed for use in imposing a sanction or sanctions following a determination by clear and convincing evidence that a member of the legal profession has violated a provision of the Model Rules of Professional Conduct (or applicable standard under the laws of the jurisdiction where the proceeding is brought).” ABA Model Standards for Imposing Lawyer Sanctions § 1.3 (1986). Similarly, Rule 10 of ABA Model Rules for Lawyer Disciplinary Enforcement requires a finding of “misconduct” as a predicate for discipline.
The positions taken by OLPR in Olson regarding the Court’s purportedly “plenary” authority under Rule 15, to impose any discipline, without the “predicate” of a rule violation, and notwithstanding conclusive determination of no rule violation, show basic misunderstandings of constitutional rights, Minnesota law, and fundamental fairness.