New push to force California lawyers to report misconduct by fellow attorneys

An influential Sacramento lawmaker has proposed legislation that would require California’s 266,000 attorneys to report wrongdoing by peers to the State Bar, the agency that regulates the legal profession.

The bill, introduced this week by state senator Tom Umberg (D-Orange), follows a Times article noting that California is the only state that doesn’t require or encourage attorneys to sue their peers for wrongdoing and who has made clear what this outsider status can be like have worked into the corruption of legendary Los Angeles attorney Tom Girardi.

Umberg, a practicing attorney who chairs the Senate Judiciary Committee, said in an interview that the Girardi scandal exposed numerous flaws in the legal system.

“One flaw is that California, unlike the other 49 states, does not place a duty on the attorney to uncover egregious wrongdoing, or even in this case, possible theft of funds that rightfully belonged to the victims. And that needs to be addressed,” said Umberg.

The proposed legislation requires a California attorney “who knows that another licensee has engaged in professional misconduct” to notify the State Bar if the violation “raises a material question as to that licensee’s honesty, trustworthiness, or fitness to practice law in… raises other respects.”

The bill exempts attorneys from disclosing to the agency information protected by attorney-client privilege or obtained in a bar association-sponsored program for attorneys with substance abuse or mental health problems.

After the bill was proposed on Monday, the chair of the prosecutor’s board of trustees announced his support for the law.

“The public, which we all must protect, will be the ultimate beneficiaries of these proactive measures,” Ruben Duran said in a statement.

Girardi, a nationally known trial attorney, claimed a prominent and powerful place in Golden State law despite numerous allegations in court cases that he embezzled settlement funds and cheated fellow attorneys out of fees. After his law firm collapsed two years ago, many in the LA legal community said Girardi’s theft was something of an open secret.

In the Times report published in October, a former attorney for his firm, Girardi Keese, said he left the firm two years before it collapsed because Girardi stole millions from one of her clients, a fire victim, and his family.

Attorney Robert Finnerty told the newspaper that at the time he was researching whether he was legally required to report Girardi’s embezzlement to prosecutors.

“I was surprised we didn’t have one,” said Finnerty, who did not notify authorities but worked to file a lawsuit against Girardi and eventually secured a verdict for the fire victim’s family.

California’s legal community, the largest in the country, has resisted mandatory reporting since the 1980s, when other states began adopting versions of a model rule devised by the American Bar Assn. The contempt for it is so pronounced that many California attorneys have dubbed it the “snitch rule” or “rat rule,” borrowing gangster jargon.

Some lawyers have said the rule would be more likely to be used by opponents in the courtroom seeking a tactical advantage than those exposing serious corruption. Umberg said he expects his bill to be refined during the legislative process but wants to address “the most egregious transgressions”.

“Our challenge is to make sure it’s not structured in such a way that, for example, someone who is obnoxious during a statement is something that the [State Bar] would get involved,” said Umberg.

Carol Langford, a Bay Area attorney who frequently represents attorneys accused of wrongdoing, said she expects widespread opposition to the law and disputed the suggestion that it could have stopped Girardi.

He has been the subject of more than 200 complaints to prosecutors over the decades but has never been publicly punished.

“You can give [a mandatory reporting requirement] in the books, but that wasn’t the problem. Internal corruption of a government agency — that was the problem,” said Langford, who also teaches ethics at the University of San Francisco School of Law.

Langford said if attorneys discover wrongdoing by another attorney in a case, they have an obligation to notify their client because it is a significant development in the case. She said it should be up to clients to decide if they want it reported to the bar.

“Your primary obligation is only to your customer,” she said. “Sometimes it’s not appropriate for the bar association to know, and it’s not because you’re helping them commit a crime, but it could be embarrassing or harmful.”

Chief prosecutor George Cardona, who was appointed last year to reform the agency’s disciplinary system, opposed the law in 2015 while serving as a federal prosecutor on a statewide commission to improve professional ethics. But Cardona told the Times this fall he changed his position after seeing firsthand the damage Girardi had done to the legal establishment.

The agency’s executive director, Leah Wilson, recently acknowledged that much of the legal administration dismisses the requirement as “more for looks than effect”.

But Wilson added: “We are not in a position to know because we are the only state in the country without a similar rule. And I think that’s just no longer acceptable for us.”

https://www.latimes.com/california/story/2022-12-07/california-proposes-bill-that-would-require-lawyers-to-report-other-attorneys-misconduct New push to force California lawyers to report misconduct by fellow attorneys

Alley Einstein

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