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Attorney E-Newsletter

September 2010

Pennsylvania Supreme Court: Opposing Party Has No Standing to Challenge Representation of State

On August 17, 2010, the Supreme Court of Pennsylvania decided a high-profile case involving an attempt by a pharmaceutical company to disqualify the private law firm hired by the Commonwealth to pursue a claim for damages for Medicaid and other program funds spent as a result of off-label marketing efforts by the company.

In the case of Commonwealth v. Janssen Pharmaceutica, Inc., No. 24 EAP 2009, the company had sought to disqualify the Texas law firm of Perrin Bailey, LLP, which represents several states in similar litigation. The company attacked the contingent fee contract between the firm and the Office of General Counsel on several theories, including:

  • it restricted the ability of the state to enter into a nonmonetary settlement;
  • it was an improper delegation of spending authority;
  • it infringed on the General Assembly’s exclusive spending power; and,
  • it violated the company’s due process rights by giving a party acting on behalf of the government a financial interest in the outcome.

In the majority opinion, written by Chief Justice Castille, the Court did not reach these issues. Rather, it decided the case under the terms of Section 103 of the Attorneys Act, 71 P.S. 732-103, which states that no party other than a Commonwealth agency has standing to challenge the authority of the legal representation of the agency. The Court described Janssen’s statutory and constitutional arguments as “cogent,” but concluded that the intent of the Legislature to deny private parties the right to challenge the representation of the Commonwealth was clear.

In a concurring opinion Justice Baer, joined by Justice McCaffery, agreed with the majority’s reasoning, but expressed concern about whether the issue might be moot.

Justice Saylor filed a dissent in which he expressed the view that the constitutional issues raised by Janssen were not subject to limitation by Section 103, and that its efforts to disqualify the firm should be determined by traditional standing analysis.

IOLTA Board Increases Pro Hac Vice Fee

On August 24, 2010, the Pennsylvania Interest on Lawyer Trust Accounts Board posted an announcement that the admission fee for lawyers appearing pro hac vice in Pennsylvania proceedings will be increased from $100 to $200. Pennsylvania ranks in the bottom one-third of states in pro hac vice fees charged. The increase puts Pennsylvania in the median of all the states, meaning 25 states charge a higher fee. Moreover, fees may be waived if the out-of-state attorney is representing an indigent client.

The funds raised by this fee support the Loan Repayment Assistance Program (LRAP) administered by the IOLTA Board and the Pennsylvania Bar Foundation. The LRAP provides assistance with student loans for attorneys working for qualified agencies that provide legal assistance in civil matters to indigent Pennsylvanians.

The announcement was published September 11, 2010, at 40 Pa.B. 5128. The fee increase is effective September 24, 2010.

The PA IOLTA Board received 2,034 pro hac vice[1] applications in the year ending in June 2009. More than half came from lawyers based in five states – Texas, Georgia, New York, Illinois and Missouri.

Conviction Reporting Change Adopted; Disability Proposal Published

In February we reported a proposed change to Rule 214 of the Pennsylvania Rules of Disciplinary Enforcement regarding reporting of convictions, which would require that convictions of an attorney be reported upon a guilty verdict or plea, rather than after sentencing as the previous rule required.

On September 1, 2010, the Supreme Court of Pennsylvania approved the amendment of Rule 214(j). The rule now defines “conviction” as “any guilty verdict, whether after trial by judge or jury, or finding of guilt, and any plea of guilty or nolo contendere that has been accepted by the court, whether or not sentence has been imposed.” The rule change was published September 18, 2010 at 40 Pa.B. 5292, and is effective November 1, 2010.

In August we discussed a proposal to amend the application of Rule 301 of the Pennsylvania Rules of Disciplinary Enforcement relating to assertion of disability defenses in disciplinary proceedings. The proposal was published September 4, 2010, at 40 Pa.B. 5062. Comments are being accepted through October 1, 2010.

Going Once, Going Twice . . .

Final Notices have gone out to over 5,000 active, inactive and in-house corporate counsel who have not submitted their annual registration forms and paid the annual fee. A $100 late fee has been assessed against these attorneys. They have 30 days to pay before a list of delinquent attorneys is sent to the Supreme Court, which will result in assessment of a second $100 penalty. If you received a notice, take heed.

Board Website Shows Insurance Coverage

The Attorney Search feature of the Disciplinary Board’s website, www.padb.us, now allows the public to determine whether an attorney on active status within the state has malpractice insurance. While lawyers are not required to have insurance, Pa. R.D.E. 219(d)(1)(vi) requires lawyers to disclose on their annual fee form whether or not they are insured. In addition, lawyers in private practice are required by Rule 1.4(c) to notify clients if they do not have professional liability insurance. For each attorney on active status, one of the following statements is listed:

  • “I maintain, either individually or through my firm, professional liability insurance pursuant to the provisions of rule of professional conduct 1.4(c);”
  • “I do not maintain professional liability insurance because I do not have private clients and have no possible exposure to malpractice actions (e.g., retired, full-time in-house counsel, prosecutor, full-time government counsel, etc.);” or
  • “I do not maintain professional liability insurance pursuant to the provisions of rule of professional conduct 1.4(c), but I do have private clients and/or a possible exposure to malpractice actions.”

A Truly Adverse Possession

An Arizona disciplinary case has it all – divorce, suicide, betrayal, deception, drugs, sex, channeling, possession, New Age bookstores, and ballroom dancing.

A hearing officer has recommended a six-month suspension for attorney Charna Johnson, whose troubles arise out of her representation of her dance instructor in a divorce. According to the findings of fact, after her client’s estranged wife committed suicide, Johnson, who also owned a New Age bookstore and offered Tarot readings, began to receive what she described as the spirit of his late wife.[2] Over a period of time she communicated the dear departed’s thoughts to the receptive client, including expressions of the corporeal urges of her now incorporeal alter ego. She also continued representing the client during this time, although with co-counsel.

The matter came to light when she came under disciplinary inquiry for allegedly channeling another client’s deceased father.[3] In the course of the prior proceeding she denied during sworn testimony that she had ever channeled a deceased person for another client.

The case before the hearing officer concerned whether Johnson had lied under oath when she denied channeling for any client in the prior proceeding. Her defense was that she did not lie, because she did not “channel” the client’s late wife – she was “possessed by” the client’s late wife.[4]

This led to a remarkable sequence of testimony in which competing expert witnesses argued over whether Johnson’s beliefs in “channeling” or “possession” were delusional or not. We are not certain, but we would hazard a guess that this is the first time in the history of professional responsibility law that the reality of channeling has been at issue in a disciplinary proceeding.[5]

In the end, the hearing officer concluded that Johnson knew exactly what she was talking about, and that her testimony was false and misleading.[6] After a long examination of various factors relating to the discipline, the hearing officer rejected the bar’s advocacy of disbarment and recommended a six-month suspension followed by probation.[7] The hearing officer commented, “This case is indeed unique and it is hard to fit it into any particular category of cases.” We admire his gift for understatement.

The original series is coming soon to a premium cable channel, no doubt.

Got a Tip?

Or a question, a comment, an idea you’d like to see addressed? We are always glad to hear from you. Write us at comments@padisciplinaryboard.org.

[1] The pronunciation of “pro hac vice” seems to be a matter of dispute. Most lawyers pronounce it “pro hawk vee-chay,” “pro hack visee,” or “pro hawk veese.” According to www.speaklegalenglish.com, any of these are acceptable. Dictionary.com’s Legal Dictionary adds “pro hack veeka.” However, Merriam-Webster prefers the classical Latin pronunciation – “pro hawk wickeh.” Lesson: no matter how you pronounce it, someone is going to think you’re wrong.

[2] This is not what we mean by “spirited representation.”

[3] A potentially useful skill in probate work.

[4] We are unsure how Rule 1.7 applies to possession by an adverse party, or whether Rule 1.9 applies if the possessor is deceased. We don’t even want to think about the Rule 4.2 implications.

[5] We are quite confident that expert testimony on the subject is a first.

[6] The record does not reflect whether she was dispirited or dispossessed.

[7] As in most states, exorcism was not on the range of approved disciplinary sanctions.