Tales of typos and punctuation problems.

I’ve written once or twice in the past about how questions of punctuation and typographical error can be unimportant when the issue amounts only to pedantry. Of course, punctuation can be very important. The stage phenomenon Hamilton has a good line or two about this involving “My dearest Angelica. With a comma after dearest, you’ve written … My dearest, Angelica” with this particular Schuyler sister noting how it changed the meeting and inquiring whether Alexander intended it.

There are more mundane, less lyrical examples that can be encountered in situations every day. For example, just playing around with punctuation can change entirely the meaning of two paragraphs that only differ by their punctuation:

  • Somehow I managed not to write anything for almost two weeks. I’m sick it happened. I’ll try to do better starting now.
  • Somehow, I managed. Not to write anything. For almost two weeks I’m sick. It happened. Ill! Try to do better. Starting now.

Today’s post hits two topics with nearly nothing in common other than the role that punctuation (or asserted typographical errors) plays in each one.

The ABA Journal directs all of our collective attention to this story of a Florida lawyer who has now been disbarred for breaking into his former law firm and stealing items. The headline of the article reads: “Lawyer disbarred after breaking into former law firm; blamed punctuation problem.” Now, setting aside the fact that the ABA managed not to properly use that semicolon there in that headline, the headline is one that seems like it is designed just to make you click through to see how in the world a punctuation problem could be a defense to breaking and entering.

Go ahead and click if you want, but [SPOILER ALERT] it’s not even close to a viable defense. I’d call the role of punctuation in that case mere pedantry but I think that might be insulting even to pedants. You can read more of the details in the order disbarring the lawyer here, but the flimsy reed to support some of his conduct apparently was that because his former law firm had incorporated its professional name – Barak Law Group, PA – without putting periods after the “P” and the “A,” then he could incorporate his own entity by the same name but with “P.A.” That, apparently, would give him ownership and domain over the assets of his former law firm.

He proceeded to hold himself out in public as the owner of the firm and to file hundreds of notices of liens as well as some other public record or court documents to try to cause money to be diverted in his direction.

Of course, the lawyer in question also must have come to realize that his magical argument about the missing periods wasn’t as powerful as he hoped. One of the pieces of misconduct spelled out against him in the proceedings involved surveillance video driving home the point that his punctuation arguments weren’t opening doors for him as he had hoped:

The video allegedly showed Brady and his brother backing a truck up to the Barak firm, tying a rope from the truck to the front door and using the car to rip the door open. The video showed Brady and his brother removing a safe and the computer server, Barak testified.

In the end, he got what Florida characterizes as permanent disbarment, and the article explains that a big factor in that was a complete lack of remorse for the misconduct. Or, more lyrically as the article spells out, he “clings to his justification for his actions with a ferocity that is quite disturbing.”

Shifting gears from playing with punctuation to quickly admitting and fixing a mistake in the form of a typographical error, the Tennessee Supreme Court put out an order yesterday that adopted a new revision to what was already a pretty brand new rule approving the concept of collaborative law practice.

The rule is Tennessee Supreme Court Rule 53. The fix had to be made to Section 16 of that rule and it involves replacing the word “record” with the word “agreement.” Now, strictly speaking, that isn’t exactly what I think of when I think of a typographical error. Having the rule say “agerment” or “egreement” would be a typographical error. Going with “record” when you meant to use “agreement” seems much more like just an error. But quibbling about that would truly be pedantry.

Without poring over the entirety of Rule 53, it is difficult to see what sort of difference it makes to have referenced a “record” rather than an agreement in the provision, but, I’ll paste it below so you can guess for yourself if you’d like:

Section 16. Confidentiality of Collaborative Family Law Communication. A collaborative family law communication is confidential to the extent agreed to by the parties in a signed record agreement. Evidence of conduct or statements made in the course of a collaborative family law proceeding shall be inadmissible to the same extent as conduct or statements are inadmissible under Tennessee Rule of Evidence 408.

I’m really only including reference to it because I wrote a little bit about this rule when it was adopted back in April 2019, and I don’t believe i raised one thought that I had about it at that time.

The concept of collaborative lawyering – which at least under the Tennessee rule is now embraced exclusively in the context of domestic relations law – is in some ways antithetical to a number of recognized aspects of the practice of law and in other ways is just something of an expansion of the lawyer as intermediary rule that we still have in Tennessee (RPC 2.2).

Now, the ABA long ago jettisoned Model Rule 2.2 but Tennessee is one of two U.S. jurisdictions to still have it. If the reference isn’t striking any bells for you, it is the rule that applies:

when the lawyer provides impartial legal advice and assistance to two or more clients who are engaged in a candid and non adversarial effort to accomplish a common objective with respect to the formation, conduct, modification, or termination of a consensual legal relation between them.

Thus, aspects of the role that lawyers play in a collaborative lawyering arena can be thought of a bit like if two different lawyers were engaged in a joint venture for the purpose of serving two clients as intermediaries. But, admittedly, that analogy is imperfect at best.

[P.S. I’m fully invoking Muphry’s Law here in advance of any errors anyone spots in this post.]

Tennessee transparency update

Recently I wrote a bit about the latest Formal Ethics Opinion adopted in Tennessee including a bit of additional content focused on the enactment of this opinion as the maiden voyage of the new process involving the seeking of public comment on the FEO in draft form. If you missed those, you might want to read the two links above first in order to get up to speed.

One looming question was whether the BPR was going to be making the public comments it received before adopting the opinion actually public.

I learned today that the Board has addressed that question formally by adding a mechanism for doing so as part of its process and has posted the comments that were received regarding this particular proposed FEO here.

Having had the chance to read them, it did turn out that the only public comment received that criticized the draft opinion was the letter prepared by my colleagues. They also appear to be the only lawyers focused on the defense of products cases who submitted public comments at all. Many of the eight other comments received appear to have been submitted by plaintiffs’ lawyers.

The comments make for interesting reading as it appears that a recurring theme contained therein is how the Board got the answer correct from a public policy perspective. Making public policy, of course, is not exactly the role of the Board when it comes to issuing formal ethics opinions. At least one of the comments manages to heighten the point with respect to the conflicts presented by the interest of the lawyer and the client in ways that are not exactly addressed in the FEO. Not many of the comments make any real effort to address how it would be that destruction of the product would amount to a restriction on the lawyer’s right to practice.

Nevertheless, it is still heartening to know that (1) the Board’s approach to this new policy will include making public comments available publicly; and (2) this was not a situation where the Board received a significant amount of negative feedback and moved forward despite that fact.

Two Arkansas items involving rare procedural developments

As I attempt this week to get back into the saddle, two items – each relatively unusual and each involving Arkansas – grabbed my attention. One involves a judge and the other a lawyer.

Although Fridays are usually reserved for standard “follow ups,” the first item is in the nature of follow-up because I wrote previously about when this Arkansas judge was hit with disciplinary charges over his involvement in a protest against the death penalty around about the same time he was ruling on issues related to the death penalty in a case. The ABA Journal now has a story about the charges against the judge being dismissed by the Arkansas Supreme Court.

The reason for dismissal? The delay in the pursuit of the charges against him. The article notes that the charges were first filed against the judge back in April 2017. While both judges and lawyers alike subjected to disciplinary cases often feel like the process goes on longer than it should, and often times if you pay attention to the timelines in disciplinary opinions you see how extended the time frames often are between the opening of the case and the ultimate resolution, it is rare to see delay in disciplinary proceedings resulting in the outright dismissal of the charges. Twenty-six months would certainly be a long time if nothing at all was transpiring in the matter.

Of note, the article also mentions that the related ethics cases against six of seven justices on the Arkansas Supreme Court related to their treatment of the Arkansas judge in question (also discussed in my long-ago post) were also dismissed in November 2018 but the reasons for that dismissal are not mentioned.

On the lawyer side, a daily publication from the Tennessee Bar Association has started including disciplinary orders in its coverage of court opinions and, on Friday, it included the kind of order not seen every day on a number of fronts.

It is an order commencing a disciplinary case (or maybe not actually even truly doing that) against a Tennessee lawyer for having been convicted of a DUI offense in Arkansas. It’s unusual in a couple of respects in as much as historically there have not been many instances of any public discipline against Tennessee lawyers for criminal conduct involving drunk driving. While this order is certainly public in nature and can, itself, be something of a public censure for the lawyer involved, the order does not technically actually require the Board of Professional Responsibility in Tennessee to do anything about the situation.

The specific language of the order from the Tennessee Supreme Court reads:

This matter shall be referred to the Board for whatever action the Board may deem warranted.

Whether or not anything does come of it is unclear, the only provision that can be triggered by a DUI offense is RPC 8.4(b) and will turn on whether this particular criminal act is treated as one that “reflects adversely on the lawyer’s … fitness as a lawyer in other respects.” For what it may be worth, the lawyer in question does not have any past disciplinary history in terms of public discipline, but the Board’s website does reflect a pending petition against him that has been open since April 2018 so it would seem likely to be entirely unrelated to this offense which involved a traffic citation/arrest occurring in October 2018.

Nearly four years later… and I’m making that James Bond reference this time.

So, if any of you are still around these parts after I’ve gone some 12 days without writing any content, then you are in for me dredging someone up that I previously wrote about on June 30, 2015. An attorney named Rodger Moore.

Rodger Moore. And he was suspended for the practice of law for conduct that involved stealing adult beverages (wine) and also stealing the oil of olives. You know… olives… the garnish that goes in a martini.

I guess back in the halcyon days of this venture I considered myself above making a James Bond reference? Well, I’m four years older now and don’t consider myself above much of anything I guess. So…here goes.

Rodger Moore is no longer licensed to bill.

Also, Roger Moore was not the best Bond, but this Rodger Moore was not the best lawyer.

The need for just a bit of “dry” humor for today’s post is in order because nothing else about the story is humorous. And, in fact, while not doing so in a fashion that is at all effective for his case, Mr. Moore raises a topic in the press that is not deserving of being milked for humor of any sort — the problem of depression in our profession.

You (like me) may have seen the story in The ABA Journal about the fact that after previously being suspended for failure to disclose certain pieces of his criminal past, Mr. Moore has now been disbarred for trying to charge over $10,000 to a client he had promised to represent for free. If you’d care to read the full Ohio opinion disbarring him from practice, you can get it here.

In short-form version, a woman who qualified for legal aid representation going through a divorce agreed to switch lawyers to Moore, after Moore sent an email saying he would represent her for free. Shortly thereafter, he sent her an invoice for $9,500 but then told her she didn’t have to pay that but that he was going to seek to have the court award his fee against her husband. He never did that but did send her an $11,000 promissory note and seek to have her sign that. Eventually, he had to bow out of her case because of his suspension from practice (but not until first trying to appear in court for her the day after he was suspended). He then got an attorney he shared office space with to take over the representation. That lawyer confirmed to her that he was providing the services for free but, ultimately, filed a lawsuit against her, representing Mr. Moore’s firm, seeking to force her to pay pursuant to the promissory note.

Based on his past history, his failure to appear on his own behalf in the disciplinary case, and the fact that he tried at the eleventh-hour to proffer up his license to retire or resign from practice rather than being disciplined, the Ohio Supreme Court decided to permanently disbar him.

In a real plot twist, Mr. Moore has communicated extensively with The ABA Journal as their article reveals and shared with them a draft letter that he was thinking about sending to the Ohio Supreme Court to complain about how he was treated.

Now, I’m fortunate enough that I do not suffer from depression. As I’ve revealed before anxiety is my issue. There is no question that problems with depression are rampant in our profession and little doubt that mental health issues continue to be stigmatized, hidden, and not treated effectively when it comes to lawyers.

I don’t have the necessary clinical training to know the first thing about whether Mr. Moore’s narrative could be explained by depression but I do know that the opinion reveals that he continued to practice while suspended for a pretty significant period of time, represented himself, and that both of those facts likely played a role in his ultimate disbarment. Both of those facts are the kind of things that are also not inconsistent with side effects of depression.

Mr. Moore may not be a very good messenger for the underlying message of the continued need to preach about the awareness of mental health issues, and his claimed beef that the disciplinary process should take depression into account as a mitigating factor misses the mark because nearly all states do – through application of the ABA Standards for Lawyer Misconduct – take mental health issues into account.

But he is, albeit maybe just inadvertently, a good messenger for making an important, and hard, point. Those kinds of proceedings can only take such things into account if the lawyer is able to disclose them so that they can be considered. Mr. Moore pretty clearly didn’t disclose any issues with depression at the time of the proceedings themselves but, because of the nature of such things and, if he was representing himself, if he really was suffering from untreated depression he might not have been able to bring himself to do so.

Any lawyer interested in reading up on issues of attorney wellness can now find a variety of good resources online. Perhaps the most recent report issued by a state bar comes out of Virginia and you can read that one here if you are so inclined.

Overreaching on attorney fees. Plaintiff’s lawyers do it too.

There are always a variety of ways that examples of overreaching by attorneys on fees manage to push into the legal news. Recently, I wrote about one example involving hourly billing. More often than not, overreaching under that system is what makes the news.

It is not the only way that attorneys overreach on fees though. It is done by plaintiff’s lawyers as well.

Today’s post is about a very recent disciplinary decision issued by the Tennessee Supreme Court that publicly censures a lawyer for overreaching in connection with a contingent fee agreement. It is a case that confirms a point I have raised with a number of lawyers over the years but for which I never had ready authority – other than the rules themselves – to back up my point. Now, I’ve got this decision in Moore v. BPR to help convince folks who need convincing.

At its core, this case explains the limits on the ability of a plaintiff’s attorney to try to guard against what happens if their client rejects the attorney’s advice on whether to accept a settlement offer. There do, in fact, have to be limits on the ability to hedge against that because the ethics rules establish explicitly that the decision whether to settle a civil case or not is the client’s decision. RPC 1.2(a).

The rules clearly allow a lawyer who wishes to withdraw from representing a client over a disagreement about whether to settle a case to pursue withdrawal as long as they can justify it under one or more provisions of RPC 1.16(b). The law in Tennessee also permits such an attorney, if they do withdraw, to assert a lien as authorized by statute and pursuant to either the terms of their contract or, perhaps, depending on how things turn out for payment in the form of quantum meruit.

What the rules simply do not let a lawyer do is what happened in this new Tennessee Supreme Court case — include a term in the contract with the client that says that, if the client rejects a settlement that the lawyer advises should be accepted, then the lawyer becomes entitled – as a matter of contract – to a fee of x% of the settlement offer being rejected.

And, it does not matter what x equals in that last sentence. However, the nature of the overreach is certainly easier to spot when x happens to equal the original contingent fee percentage as was the case here.

As the Court explains, such a provision is not only antithetical to RPC 1.2(a) because of how much it undermines the right of the client as to settlement but it also takes a situation that is already difficult to balance with questions of conflicts and makes it untenable. Such a provision creates a severe conflict of interest for the lawyer at the moment the other side makes a settlement offer.

You can read the full opinion here. As a bonus, this case is also a primer for those who do disciplinary defense on the potential diminishing returns involved in pursuing appeals from public censures given that the rules prohibit a hearing panel who concludes that discipline should be imposed from imposing any discipline less serious than a public censure.

Thus, any attorney who seeks to appeal from a public censure imposed by a hearing panel has to understand that victory on appeal can only be obtained through a reversal in the nature of complete exoneration on the allegations of disciplinary violations. Far too many attorneys who represent themselves or who dabble in disciplinary defense often fail to understand that dynamic.

When you’re right, you’re right. Even when you’re Right.

I’ve written a bit in the past about the differences between unified bars, like what exists in North Carolina, and voluntary state bar associations such as what we have in Tennessee. (If you are uninterested in clicking on either of those links, as a refresher, the fundamental difference is that unified bars require that anyone who is licensed to practice in the state is a member of the state bar association.)

Among the biggest differences are the risks attendant for unified bars when they take various actions, including issuing ethics opinions, that they are treated as a government entity.

A case working its way through the Texas courts emphasizes another of those risks – the risk that engaging in efforts that bar leadership may believe to be in the best interest of society will be challenged by members of the mandatory bar association on First Amendment grounds.

Those risks have been made starker by the 2018 ruling of the United States Supreme Court in Janus v. AFSCME.

Texas is a state with an unified bar and exactly such a lawsuit has been brought by Texas lawyers over the State Bar of Texas having programs involving diversity initiatives, access to justice, and programs seeking to prevent the deportation of immigrants. This matter came back into the legal news this week because the Attorney General of Texas has taken the somewhat unusual step of filing an amicus brief to side with the lawyers rather than with the government agency under fire.

You can read the Texas AG’s amicus brief here. But, in sum, the argument it makes is that the funding of speech and policies with which one disagrees using bar dues you are required to pay is coerced speech and, in light of what Janus has said about that, is a violation of the First Amendment.

Now, long-time readers of this space will know I’m not much of a fan of the current Texas Attorney General, and I have little doubt that this particular elected official would never have gotten involved in this fashion if the State Bar of Texas had been taking positions more in keeping with his personal politics. (For what it is worth, my own biases had me thinking that even before I read the part of the ABA Journal article pointing out that one of the plaintiffs to whom the AG is lending his support is a conservative group with a PAC that has donated hundreds of thousands of dollars to past campaigns of the AG as well as his wife who happens to be a state senator).

But none of that changes the ultimate fact here that – because of the downsides attendant with the unified bar structure – he’s probably on the side that has the stronger arguments under the First Amendment issue as interpreted by Janus, at least as to the hot-button issue of immigration reform. (I think it is much tougher sledding to claim that fighting for access to justice is not a core regulatory purpose of a bar association sufficient to satisfy exacting First Amendment scrutiny.)

This latest development in the Texas litigation is also further proof, in my opinion, that the voluntary bar association model used by Tennessee is such a vastly better approach overall.

The TBA has repeatedly been able to take positions that I personally view are on the right side of history on a variety of issues with the only risk being that if it somehow gets viewed as too political by someone who disagrees with what it is advocating for then it might lose that lawyer as a member. I would imagine, most of the time, people don’t decide to quit because, on the whole, our voluntary bar association is a worthwhile thing to be part of.

For example, I’m not at all pleased that the TBA has invited (and I’m presuming is paying) Ken Starr to come speak at its upcoming annual convention. I think Starr ought to be treated as persona non grata for a variety of reasons. His most recent hypocrisy regarding attacks on the contents of the Mueller Report as “too detailed” is just the latest example. His utter failure to do the right thing in his time at Baylor is likely, by far, the biggest reason I wish the TBA wouldn’t want him to be any part of any of its programming.

I’m disappointed, but I’m not going to quit my membership over it. I will simply refuse to attend the convention as my small act of demonstrating my distaste with the decision.

But, most importantly, I could never sue about the fact that my dues are being used to fund such an invitation because we’re not an unified bar. If we were, then under Janus I might just have a claim and that’s not at all a good thing for bar associations to have to deal with.

Disbarrment time in D.C.?

Today’s a pretty big day for the future of democracy in the United States. Not just because it is Law Day, but because Law Day is being commemorated pretty ironically as the man with a very checkered past currently serving as the Attorney General of the United States testifies to Congress about why he didn’t mean the things he said to get the job and why, apparently, the current occupant of the White House should be free to obstruct justice if he is frustrated.

A couple of weeks ago, I wrote about a rare situation in which a corporation sued its former GC for what was essentially a legal malpractice claim and mentioned that, if nothing else, it served as a good reminder for lawyers who represent organizations that it is the entity, and not the CEO or its other officers, that are the client.

Many moons ago when I thought that Jeff Sessions might end up being the worst AG we were going to get under the current administration I wrote about the fact that the AG always needs to remember that the President is not the client.

The fact that we now have an AG who appears to be even worse is certainly proof of the small and meaningless nature of my voice, but also still more proof of how important the distinction between who is the client and who is not should be.

Of course, as an exchange with Atrios that I’ve had today on Twitter bears out, rampant lying by the person who is arguably the most prominent lawyer in the nation is – in addition to being an existential threat to democracy in this instance – not a good look for our profession as a whole.

So, happy Law Day, I guess.

Friday follow up: undo the good and just leave the bad.

So, not quite six weeks ago, I wrote about a development from Tennessee that was something of a mixed bag.

Our Board of Professional Responsibility put out a proposed Formal Ethics Opinion for public comment that, in my opinion, was not a good opinion fraught with quite a number of significant flaws. (If you missed that post, you can check it out here.)

The substance of the draft was the bad part of the bag. But, for the first time under a new policy, the Board actually put a draft opinion out publicly for comment prior to formally adopting it. That, of course, was the good stuff in the bag.

Presumably, the Board’s rationale for putting the draft FEO out for comment was to give itself an opportunity to receive feedback before making a final decision about whether to issue the opinion as-is or at all or in some revised form. As the prior post indicated, the deadline for the submission of public comments was April 10.

Cut to earlier this week on April 23. That was the date that the Board put out the Spring 2019 edition of Board Notes. It is a semi-annual publication which is a collection of a lot of things, including reports on discipline, statistics about the handling and processing of cases, articles about rule changes or other items of interest, and occasionally formal ethics opinions that have been adopted since the prior issue of Board Notes.

But while Board Notes is a valuable resource, it is something that most folks only receive by way of an email and that a significant number of people pay no attention to whatsoever. (So, in a lot of ways, it is like this blog, except for the receiving it by email part.)

Without any fanfare or explanation, Formal Ethics Opinion 2019-F-167 was included in Board Notes. That was how Tennessee lawyers had the chance to first learn that the draft FEO put out for public comment had now been adopted. (Actually, if you received but have deleted the email, or if as is pretty statistically likely you are not a Tennessee lawyer, you can always go here at the Board’s website to read issues of Board Notes.)

If you are a diligent reader of all of the links, you will see that Formal Ethics Opinion 2019-F-167 has been adopted without change from its draft form.

Now, perhaps the Board received overwhelmingly positive feedback from the bar on the draft opinion and so felt confident that it got it right. Or maybe it received very little feedback about the draft opinion and decided it probably got it right and no one really cared either way.

At this point, it is impossible to know because there is nowhere on the BPR website or anywhere else that the bar (or the public) can go to presently to see what public comments were received about the opinion.

I happen to know that the Board received at least one comment – a negative one – and that it came from lawyers who actually do focus their practice on defending products liability cases because they shared a copy of the comment they sent in with me. The substance of their concerns made me feel a lot better about the thoughts I shared because they were able to more cogently point out the nature of the evidence that actually does matter in a products liability case. (They also happened to be lawyers who practice in other offices of my law firm, which I mention for the purposes of transparency.)

Perhaps, ultimately, the Board will make the comments received on the draft FEO publicly available somewhere. I hope so. Otherwise, if there won’t be transparency in terms of the bar’s reaction to proposed opinions, then there really isn’t much positive about even putting them out for comment in the first place.

In fact, there is real institutional downside for the Board in leaving members of the bar wondering whether the Board does not actually care about evaluating the feedback it receives on its proposed opinions.

If the Board isn’t going to make the comments it receives available for the bar to read, then it likely should not go to the trouble of putting drafts out for comment in the first place.

If the Board simply intends to plow forward with draft opinions regardless of perceived flaws, then it definitely should just scrap the whole endeavor.

Rarer than rare

I could try to open this post with references to song lyrics from either Toad the Wet Sprocket or Arctic Monkeys, but, either way, I’d likely lose most of you from the jump. (I could also try to claim knowledge of the Glenn Miller song that uses the exact phrase but while I may look it I’m just not old enough to know that reference.)

So, instead, we’ll go straight into the situation referenced by the title of the post. I’ve written in the past about the rare nature of instances of departures from law firms actually resulting in litigation and the rare nature of law firms suing other law firms over advertising practices. But what we discuss today is much rarer than either of those things, a corporation filing suit against its former general counsel for what is the equivalent of a claim for legal malpractice .

In the last few weeks there has been discussion in the legal press of a $70 million lawsuit filed by Hertz against three of its former high-level executives. One of those three defendants is Hertz’s former General Counsel. (He was also an EVP and Secretary but the lawsuit focuses only on his status as General Counsel so we shall do the same.)

So, what’s the deal? Well, Hertz has had some trouble over the years with the SEC where it ended up having to restate its financials for fiscal years 2011, 2012, and 2013. The restatement filing was made with the SEC in 2015 and amounted to a $231 million reduction in Hertz’s net income. The restatement was attributed to “material weaknesses” in Hertz’s internal controls which the lawsuit is claiming were either caused or made worse by the mismanagement of the company by the three defendants being sued, including the former General Counsel.

If you want to read a good summary treatment of the suit, you can grab one here or here. It certainly details a story of significant corporate turmoil and upheaval and paints a very unflattering picture of the former CEO (who is one of the three named defendants) and his management style. If you are interested in reading the full lawsuit filed in federal court in New Jersey, you can get it here.

If you want to get a clear flavor of the kinds of allegations involved without getting fully into the weeds – and in particular the almost “ride-along” nature of the case against the General Counsel – paragraph 6 of the Complaint is a pretty good landing point. (Frissora was the CEO; Douglas was the CFO; and Zimmerman is the General Counsel in question.)

Upon learning that Hertz might miss a financial target, Frissora would demand mandatory team-wide calls and continuous weekend meetings, and would repeatedly berate subordinates who did not come up with a sufficient number of “paradigm-busting” accounting strategies to fill the gaps between Hertz’s actual and expected performance, accusing them of not being team players if they would not play his game. Defendants Douglas and Zimmerman – Frissora’s right-hand subordinates who were entrusted with effectuating his orders — failed to stop, effectively counterbalance, or otherwise offset or report to Hertz’s board of directors . . . Frissora’s inappropriately forceful tone, in breach of their duties owed to Hertz.

The suit seeks to claw-back somewhere in the neighborhood of $70 million in incentive-based payments that were made to the three including significant amounts of money paid to each on their way out the door after they resigned and the financial problems had become known – payments that the lawsuit itself tags with the shorthand reference “Golden Parachutes.”

Paragraph 21 of the Complaint goes into the most details in terms of the allegations against the General Counsel. It does not, of course, reference the ethical duties that a lawyer to an organizational entity owed under RPC 1.13 but, at its heart, the dynamic that is discussed in that rule in most jurisdictions is exactly what this lawsuit is all about: the allegation that if Zimmerman wasn’t able to stop Frissora from engaging in wrongdoing he should have informed the Board of Directors of Hertz about what was going on.

Based on not much more than a very surface-level read, it is an extremely interesting story where I’d love to learn what the other side of it looks like. Given how rare this kind of lawsuit is, it would not be at all surprising for it to get resolved in a way that does not end up shedding light on whether the former general counsel’s story is one where he’s joined at the hip with the former CEO in a belief that everyone was trying to do the best thing for Hertz or if his story is one in which he wasn’t comfortable with what was going on but didn’t think he could rock any boats or somewhere in between. (One note of curiosity about the litigation and the dynamic, one of the two articles linked above goes into details about how the defendants in the New Jersey federal court suit have become plaintiffs in a suit filed in Delaware to seek to make Hertz pay them for the costs incurred in defending the suit Hertz has brought.)

At this point at least, and regardless of how any of it plays out further, the situation offers a ready highlight for lawyers who represent entities, and particularly in-house counsel, about how important it is to always remember that it is the entity that is the client – and not any particular officer – and how big the stakes can be when it comes to trying to figure out whether the person giving you instructions is acting in the best interest of that entity or not.

Not breaking: Dentons didn’t have to say “aloha” to Hawai’i

Well, at least not the goodbye, “aloha.” They can still say the other one as much as they want.

So, you probably have seen a headline somewhere in your online surfing about this wacky issue litigated before the Hawai’i Supreme Court. But, just in case you didn’t, here’s all that I think you need to know about it.

Dentons, who has featured here a few times before, would appear to be the world’s largest law firm at present. Back in 2018, it swallowed up a Hawai’i law firm. Since then it has had lawyers in its firm practicing law in Hawai’i. Not the stuff so far of an interesting story.

In one of the pieces of litigation its lawyers have been handling in Hawai’i, they filed a motion to seek pro hac vice admission on behalf of a non-Dentons lawyer licensed in California. The opposing party opposed the pro hac motion not on the basis of any problem with the California lawyer, but on grounds that Dentons was engaged in the unauthorized practice of law. Why? Is a question you, dear reader, might ask. Well, because not every lawyer at Dentons is licensed in Hawai’i.

Sounds like a crazy argument doesn’t it?

It actually was a crazy argument, but it was an argument supported by a slightly-messed up court rule. You can read the entirety of the 21-page opinion resolving the situation here.

The short version of what you’d find if you had the time to read that 21-page opinion is that it is true that Hawai’i used to have extremely restrictive and parochial rules preventing anyone who was not a Hawai’i-licensed lawyer from serving as a partner in a law firm in Hawai’i.

Believe it or not, those restrictions were a part of Hawai’i’s ethics rules until 1981. Beginning with changes starting in 1981, those restrictions were lifted and modified. A number of places in the present ethics rules in Hawai’i clearly indicate that it must be true that a multi-state law firm can have offices in Hawai’i. (One of them is Hawai’i’s RPC 7.5 about letterhead. This marks the first time in history I’ve found an ethics rule about letterhead to have been a helpful part of a state’s ethics rules.) But there was still one Hawai’i rule, not in the ethics rules but a different Hawai’i Supreme Court rule that had potentially problematic language if you were part of a multi-state law firm — Haw. Sup. Ct. R. 6 “Lawyer’s Professional Business Organizations.”

Specifically, Section (d)(1) of that rule provided that “[s]hares or interests in a lawyers’ professional business organization may be owned only by a lawyers’ professional business organization or by one or more persons licensed to practice law in this state by this court….”

Sometimes it only takes the slimmest of reeds for a certain kind of lawyer to be willing to make what otherwise seems like an outrageously foolhardy argument on behalf of a client. Turned out that the lawyer opposing Dentons in this case was, at least for a short period of time, that kind of lawyer. (NB: If you are looking for further proof of any pet theories you have about living in a simulation, the lawyer’s surname is (no kidding) Bickerton and, according to this article from a publication in Hawai’i he had the chutzpah to actually call one of Dentons’ arguments a “dumb ass argument.”)

The Hawai’i Supreme Court was able to dispose of this issue, and avoid having to address serious constitutional questions that would have arisen had Bickerton’s client’s rule interpretation been given merit, by explaining that the rule in question had been superseded by implication.

The court also ended its opinion by addressing any concerns that might be raised over the possibility that attorneys not licensed in Hawai’i could direct the conduct of Hawai’i lawyers without being subject to the jurisdiction of the disciplinary authorities in Hawai’i. It did so by referencing case law that (thankfully) concluded that Oregon general counsel for an Oregon company was not engaged in unauthorized practice in Hawai’i by assisting from Oregon and being actively involved with local Hawai’i counsel.

That portion of the opinion seems only to have been necessary because Hawai’i is still operating with an antiquated version of RPC 5.5 in place. While the Hawai’i Supreme Court has these issues in the front of its mind, it really ought to give some thought to adopting a version of ABA Model Rule 5.5 to make things a bit easier over there.

Until then, Me ka aloha pumehana.