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New California Lawyers Association Holds First Meeting in San Diego September 14-15
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The first ever meeting of the new California Lawyers Association (CLA) will be held in San Diego Friday September 14 and Saturday September 15. CLA is a voluntary organization created by the transfer of the former State Bar Sections and California Young Lawyers Association from the State Bar effective January 1, 2018. CLA holds the promise of being a strong advocate for all California lawyers unrestrained by the burden of also being a government regulatory agency as well as a positive force in the lives of all California lawyers
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Advanced Consent to Conflicted Representation Invalid Where Actual Conflict Not Disclosed to Client
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Shepard Mullin v. J-M Manufacturing
California Supreme Court, case no. 2 filed 8/30/18. Large law firm proffered advance conflict waiver to corporate client purporting to waive all present and future conflicts arising fro law firm's representation of other client. Law firm did not disclose that it was actually representing a party adverse to the client in another matter. Client's general counsel executed the waiver. Client then discovered the conflicting representation and successfully moved to disqualify law firm in that matter. Law firm then filed an action against the client for approximately $3 million in unpaid fees. The Superior Court confirmed an arbitration award of those fees but the Court of Appeal reversed, finding the ethical misconduct voided any right to fees. The Supreme Court held that the firm violated Rule of Professional Conduct 3-310(C) because the waiver did not disclose the conflict but that this did necessary void all right to compensation. The matter was remanded to the trial court to determine if the firm had any right to quantum meruit recovery.
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Breach of Fiduciary Duty Claim Against Lawyer Appropriate for "Substantial Factor" Causation Test
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Fourth App. Dist., Div. 3, case no. G054247, published 8/8/18. Lawyer representing professional swimmer engaged in conflicted representation by also representing adverse party. The jury found for the swimmer but the trial court granted the lawyer a new trial on the grounds that she not proven causation between the conflict and her emotional distress damages. The Court of Appeal reversed, finding that her breach of fiduciary claims should be evaluated under the "subtantial factor" test, not the "but for" or "case within a case" standard appropriate to legal malpractice claims based on breach of the standard for care. The original judgement was ordered reinstated.
Comment: expect a petition for review to the Supreme Court on this one!
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Attorney Approving Settlement Agreement "Form and Content" Not Liable for Breach of Confidentiality Provision
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Fourth App. Dist., Div 2, case no. E066267, filed 8/13/18. Lawyer approves "form and content" in a written settlement agreement that contains a confidentiality provision. Lawyer later discussed the case with a media reporter. Opposing party files an action against the lawyer for breach of contract and other causes of action. Lawyer files anti-SLAPP motion which is denied on the breach of contract because the lawyer was not a party but granted as to the other causes of action. The Court of Appeal reversed, finding that because the attorney was not party, the opposing party could not prevail on their breach of contract claim.
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Public Comment: Sanctions in Discipline Matters
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The State Bar is seeking public comment on a proposal that would a rule providing for monetary sanctions in discipline matters. California Bus. & Prof. Code section 6086.13 authorizing monetary sanctions was passed in 1994 but never acted upon by the State Bar. The proposed new State Bar Rule of Procedure 5.137 would purport to allow the State Bar Court to recommend to the Supreme Court the payment of a monetary sanction not to exceed $5,000 for each violation, to a maximum of $50,000 per order, with those monies going the State Bar Client Security Fund, based on consideration of a number of factors.
Comment: the mission of the State Bar is protection of the public, not punishment. The imposition of punitive sanctions seems incompatible with this goal. The main motive for enacting this rule after a lapse of 25 years is funding the Client Security Fund, which is experiencing long delays in paying out claims due to funding shortfall.
Deadline
October 2, 2018
Direct comments to
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Legislature Passes State Bar Fee Bill Making Us All "Licensees" and Confirming Name of the California Lawyers Association
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The Assembly has passed AB 3249. The Legislation authorizes the State Bar to collect licensing fees of $390 from lawyers in 2019. It also makes a number of other changes, including amending the Business and Professions Code to replace references to "members" with "licensees". These changes reflect the change in status of the State Bar to a pure regulatory agency. The bill also confirms the name of the new California Lawyers Association, which will henceforth discharged the trade association functions formerly part of the State Bar of California. The bill would also allow the State Bar Court to place an attorney convicted of a crime and incarcerated on inactive enrollment for the period of the incarceration.
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Nervous Time: 60 Days Until New Rules of Professional Conduct: Are You Ready?
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The California Supreme Court issued an order on May 9, 2018 approving 62 new California Rules of Professional Conduct, effective November 1, 2018. The new Rules follow the American Bar Association Model Rules numbering system and adopt much of the text of the Model Rules, along with many California innovations. These Rules will dramatically change the way California lawyers practice -- especially new Rule 1.7 on conflicts, new Rule 1.15 on handling clients funds, new Rule 4.3 on contact with represented persons, new Rules 5.1, 5.2 and 5.3 on supervising subordinate lawyers and non-lawyers and new Rules 7.1-7.5 on advertising and solicitation. But there is much more in the new Rules that you need to know about. The Ethics Lawyer Newsletter will cover all the changes over the next few months. Below is link the Court's order approving the Rules and the text of the new Rules.
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California Supreme Court Adopts Attorney Fingerprinting Rule
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New California Rule of Court 9.5.5 Requires All Attorneys to be Fingerprinted Before December 1, 2019
On June 1, 2018, the California Supreme Court adopted new California Rule of Court 9.9.5 requiring all California attorneys to submit new fingerprints to the State Bar by December 1, 2019. Failure to do so. Failure to be fingerprinted if required by this rule may result in involuntary inactive enrollment pursuant to Business and Professions Code section 6054, subdivision (d). Attorneys are required to bear the cost of the fingerprinting.
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David C. Carr
David C. Carr is a lawyer in private practice in San Diego, California. Since 2001 his practice has emphasized representing attorneys in matters involving legal ethics and the law of lawyering, including discipline defense, bar admissions, attorney fee disputes, attorney professional responsibility and ethics advice.
Mr. Carr graduated from Loyola Law School in 1986 and was admitted to the California Bar that year. After practicing in business litigation and commercial law, Mr. Carr spent 12 years as staff attorney, discipline prosecutor and manager at the State Bar of California, before returning to private practice in 2001.
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