More UPL Madness From Ohio

You may recall some past discussion here of the prolonged saga of the Dinsmore lawyer who moved from one of its offices in Kentucky to its Cincinnati, Ohio office and nearly was denied comity admission in Ohio over accusations of the unauthorized practice of law.

While that story ended happily — she was ultimately determined not to have character and fitness problems after the Ohio Supreme Court decided that it was not the unauthorized practice of law for her to sit in a chair in Ohio and continue to work on Kentucky cases using her Kentucky license while awaiting bar admission in Ohio — it was unnecessarily messy for all concerned.

In the past, one of the points I have raised about bar regulators using UPL accusations as a cudgel is that it seems that many jurisdictions seek to have it both ways – arguing that you are always practicing law “in” their jurisdiction whether they have to put you there through being in a seat in the state or if they have to put you there despite the fact that your seat is in a different state.

The most recent UPL ruling out of Ohio demonstrates that Ohio apparently has this proclivity as well.

Right at the end of 2018, the Ohio Supreme Court issued an order concluding that a lawyer, who was licensed in New York, New Jersey, and California, and his law firm, had engaged in UPL by representing debtors who lived in Ohio. The order wasn’t actually a disciplinary penalty but it essentially enjoined them from further practice in Ohio, and imposed a $2,000 civil fine.

The Panel Report which the Court adopted through its order provided detail regarding the representation:

This matter involves Respondents’ representation of an Ohio resident, Timothy Hoover . . . .  Respondents executed a Power of Attorney document on January 6, 2010, through which Mr. Hoover appointed Respondents as “his true and lawful attorney.”  On May 14, 2010, Respondents on behalf of Mr. Hoover, issued a letter to Ohio attorney Lee Peterson, who represented CitiFinancial, Inc. (“CitiFinancial”), a creditor of Mr. Hoover’s.  Respondents held themselves out in the May 14, 2010 letter as Mr. Hoover’s counsel, identifying themselves as a law firm and referring to Mr. Hoover as their “client.”  A similar letter followed on May 27, 2010.  It appears that Respondents’ outreach coincided with a suit filed by CitiFinancial against Mr. Hoover in the Licking County Municipal Court for money owed on a note, though Respondents did not make, or attempt to make, an appearance in that matter.  Regardless, the facts are undisputed (1) that CitiFinancial sued Mr. Hoover, an Ohio resident, in an Ohio court based on transaction and default that occurred in Ohio, and (2) that Respondents, without any legal counsel licensed to practice law in Ohio, contacted counsel for CitiFinancial and purported to represent Mr. Hoover in debt negotiations on that Ohio matter.

Of course, the correct response to someone laying out those “undisputed” facts in a just world would be: so what?

Neither the order nor the Panel report it adopted provide all that much in the way of detail about any of the arguments made by the lawyer to defend himself against the charges (and, in fact, it mostly reads like he didn’t.)

A review of Ohio RPC 5.5 demonstrates though that there were at least two strong arguments that should have been pursued because Ohio’s version of that rule largely tracks the ABA Model Rules.

First, assuming that the lawyer truly was not only ever going to attempt to negotiate the debt reduction without ever being willing to appear in the lawsuit, the lawyer should have been able to argue that, as long as he had no reason to think he could not ultimately be admitted pro hac in the lawsuit if negotiation was unsuccessful, (c)(2) should provide sufficient cover. That rule provides the ability on a temporary basis to provide services:

reasonably related to a pending or potential proceeding before a tribunal in this or another jurisdiction, if the lawyer, or a person the lawyer is assisting, is authorized by law or order to appear in such proceeding or reasonably expects to be so authorized;

Second, assuming that the lawyer couldn’t look to (c)(1) because they were never going to do anything beyond negotiating, the lawyer could have looked to Ohio RPC 5.5(c)(4) for approval to contend that these negotiations for the client were ones that “arise out of or are reasonably related to the lawyer’s practice in a jurisdiction in which the lawyer is admitted to practice.” This would be because, as the Panel report and Order also explained, the lawyer and his firm’s “practice includes counseling and assistance to individuals regarding the reduction of consumer debt. Once retained, Respondents contact their client’s creditors and attempt to negotiate a reduction of outstanding debts.”

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