John Doe v. Idaho State Bar

IN THE SUPREME COURT OF THE STATE OF IDAHO
Docket No. 44219
JOHN DOE (2016-20), )
) Boise, September 2016 Term
Petitioner, )
) 2016 Opinion No. 129
v. )
) Filed: November 3, 2016
IDAHO STATE BAR, )
) Stephen W. Kenyon, Clerk
Respondent. )
______________________________________ )
Appeal from the Professional Conduct Board of the Idaho State Bar.
The decision of the Hearing Committee of the Professional Conduct Board is
affirmed.
Hawley, Troxell, Ennis & Hawley, LLP, Boise, for Petitioner. Merlyn W. Clark
argued.
Idaho State Bar, Boise, for Respondent. Bradley G. Andrews argued.
_____________________
J. JONES, Chief Justice
This is a petition for review of the decision of a hearing committee of the Professional
Conduct Board of the Idaho State Bar affirming Bar Counsel’s imposition of a private reprimand
against John Doe.
I.
FACTUAL AND PROCEDURAL BACKGROUND
John Doe was counsel for Plaintiffs in a class action, Gibson v. Credit Suisse, CV 10-1-
EJL-REB, filed in the United States District Court for the District of Idaho on January 3, 2010.
Defendants in the action filed a motion to dismiss Plaintiffs’ Second Amended Complaint.
United States Magistrate Judge Ronald E. Bush issued a Report and Recommendation dismissing
some of Plaintiffs’ claims, which was adopted in part by United States District Judge Edward J.
Lodge. Discovery was stayed pending resolution of Defendants’ motion to dismiss. While the
Report and Recommendation was pending before Judge Lodge, Plaintiffs filed a motion for an
order to issue a subpoena for Michael Miller, the Senior Director of the appraisal division of
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defendant Cushman & Wakefield (“C&W”). Attached to the motion was an affidavit sworn by
Doe in which he stated that Miller had provided incriminating testimony about Credit Suisse and
C&W in front of Doe and other attorneys on March 19, 2011. A transcript of the alleged
testimony was appended as Attachment A to Doe’s Affidavit, entitled “Declaration of Michael L.
Miller, MAI.” This declaration was not signed by Miller. Doe represented to the court that Miller
was unwilling to sign an affidavit for fear of retaliation by Defendants. Judge Bush denied the
motion.
Plaintiffs were granted leave to amend their complaint as to certain claims dismissed
without prejudice by Judge Lodge. Plaintiffs filed their Third Amended Complaint on April 21,
2011. The Third Amended Complaint included several references to statements from Miller’s
unsigned declaration. Also on April 21, 2011, Plaintiffs filed a motion to amend their pleadings,
seeking to include a breach of fiduciary duty claim against C&W, relying on Miller’s unsigned
declaration. Over the next year, Plaintiffs continued to rely on Miller’s unsigned declaration in
defending against Defendants’ Motion to Dismiss the Third Amended Complaint and in support
of their Motion to Amend and Motion for Partial Summary Judgment. Judge Bush issued a
Report and Recommendation on February 17, 2012, granting Plaintiff’s motion to amend,
concluding that Miller’s statements revealed a conspiracy to support the breach of fiduciary
claim, and denying Defendants’ renewed motion to dismiss. Judge Lodge adopted in part and
rejected in part the Report and Recommendation on March 30, 2012.
Plaintiffs had been relying on Miller’s unsigned declaration from March 2011 through
February 2012. However, Miller had signed an affidavit on May 9, 2011, and Miller’s counsel
sent that affidavit to Doe shortly thereafter.1 As noted in Bar Counsel’s findings, Miller’s signed
affidavit differed from the unsigned declaration in a number of respects. Doe did not disclose the
existence or the contents of Miller’s signed affidavit to the district court or Defendants.
On April 27, 2012, defendant C&W received a copy of Miller’s signed affidavit from
Miller’s counsel. C&W then submitted Miller’s signed affidavit to the district court and moved
for reconsideration of Judge Lodge’s March 30, 2012 order. C&W also filed a motion for
sanctions, arguing that Plaintiffs and their counsel committed misconduct by relying on Miller’s
unsigned declaration for over a year while Doe knew of the existence of the signed affidavit and
1
Miller actually signed two identical affidavits, one in Missouri on May 4, 2011 and one on May 9, 2011, in Texas.
As these affidavits are identical this memorandum treats them as one and the same.
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failed to disclose it to the court. Judge Bush imposed sanctions against Plaintiffs and counsel,
finding in part that counsel violated Idaho Rule of Professional Conduct (“I.R.P.C.”) 3.3. Judge
Lodge affirmed the order on October 17, 2014.
On September 13, 2013, Bar Counsel asked Doe to respond to the issues raised in Judge
Bush’s order imposing sanctions. After an investigation, Bar Counsel issued a letter to Doe
detailing Bar Counsel’s conclusion that Doe violated I.R.P.C. 3.3 by knowingly making a false
statement of fact to a tribunal or failing to correct a false statement of material fact. Bar Counsel
found that after Doe received the signed declaration his “representations to the Court that Miller
refused to provide sworn testimony absent a deposition were no longer true. Moreover, [he]
continued to rely, and allowed the Court to consider, statements by Miller as set forth in his
Unsigned Declaration that Miller omitted in the Signed Affidavit.” In the letter, Bar Counsel also
concluded that Doe’s conduct was prejudicial to the administration of justice in violation of
I.R.P.C. 8.4(d) because his “actions unnecessarily and unreasonably multiplied the proceedings,
and required the expenditure of ‘additional resources’ by the parties and the Court.” Bar Counsel
imposed a private reprimand for the above violations and informed Doe that he may seek review
by a hearing committee of the Professional Conduct Board.
Doe requested reconsideration from Bar Counsel, which was denied on September 30,
2015. Doe then filed a written request for review by the Professional Conduct Board on
October 14, 2015, and a hearing committee was appointed. A hearing was held before the
appointed Hearing Committee (“the Committee”) on March 7, 2016. The Committee issued a
decision that day, affirming the decision of Bar Counsel. The Committee’s decision did not
include findings of fact or conclusions of law.
Doe sought reconsideration of the Committee’s decision, arguing that the Committee was
required to make independent findings of fact and conclusions of law when reviewing Bar
Counsel’s decision and that there was not clear and convincing evidence supporting Bar
Counsel’s finding that Doe violated I.R.P.C. 3.3 and 8.4(d). The Committee issued an order
denying reconsideration on May 16, 2016, concluding that it was not required to make
independent findings of fact and conclusions of law when conducting a review hearing. Doe then
filed a petition for review by this Court.
II.
STANDARD OF REVIEW
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This Court “bears the ultimate responsibility for determining what sanctions should be
imposed on an attorney.” Wilhelm v. Idaho State Bar, 140 Idaho 30, 34, 89 P.3d 870, 874 (2004).
In reviewing a hearing committee’s decision the Court looks to see if the hearing committee’s
decision was clearly erroneous or arbitrary and capricious. Id. This Court “gives the hearing
committee’s findings of fact great weight,” but the Court “independently reviews the record and
assesses the evidence.” Id. “The misconduct must be proven by clear and convincing evidence.”
Id. “However, the disciplined attorney bears the burden of proving the evidence does not support
the factual findings.” Id.
III.
ISSUES ON REVIEW
1. Whether the Committee erred by failing to issue independent findings of fact and
conclusions of law.
2. Whether the Committee’s affirmance of Bar Counsel’s conclusion that Doe violated
I.R.P.C. 3.3(a)(1) was clearly erroneous.
3. Whether the Committee’s affirmance of Bar Counsel’s conclusion that Doe violated
I.R.P.C. 8.4(d) was clearly erroneous.
IV.
ANALYSIS
A. The Hearing Committee did not err by failing to issue independent findings of fact
and conclusions of law.
Doe argues the Committee erred by failing to issue independent findings and facts and
conclusions of law when reviewing Bar Counsel’s decision to impose a private reprimand,
relying on Idaho Bar Commission Rules (“I.B.C.R.”) 502, 503, and 509.
I.B.C.R. 502(c) outlines the powers and duties of the Professional Conduct Board,
including having “its Hearing Committees make findings of fact, conclusions of law and
recommendations with regard to the cases assigned to such Hearing Committees.” I.B.C.R.
502(c)(6). Hearing committees are empowered to “[r]ule upon motions and other matters
assigned by the Professional Conduct Board” and “[m]ake findings of fact, conclusions of law
and recommendations with regard to cases assigned by the Professional Conduct Board.”
I.B.C.R. 503(b)(2), (4).
Importantly, the Bar Commission Rules make a distinction between informal and formal
disciplinary proceedings. I.B.C.R. 509(b) provides that after Bar Counsel has conducted an
investigation, he or she may dismiss the matter or take disciplinary action. Under I.B.C.R.
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509(c), if Bar Counsel determines that a violation has occurred, he or she may:
(1) Issue an informal admonition or private reprimand to the Respondent;
(2) Impose probation as provided by Rule 506(f) either as an independent
Sanction or in conjunction with actions taken under subsection (c)(1) above;
(3) Impose restitution and/or costs as provided by Rules 506(i) and (j), either as
an independent Sanction or in conjunction with actions taken under subsections
(c)(1) or (c)(2) above;
(4) Seek, in appropriate circumstances, transfer to disability inactive status under
Rule 515;
(5) File Formal Charges, with concurrence of the Board of Commissioners; and/or
(6) Petition for interim suspension, as provided in Rule 510.
If Bar Counsel disposes of the matter by dismissing the action, issuing an informal admonition or
private reprimand, imposing probation, or imposing restitution, then the grievant or respondent
may request review by a Hearing Committee. I.B.C.R. 509(d).
After review, the Hearing Committee may:
(A) remand the matter, or any new matter arising from the hearing, to Bar
Counsel for further investigation;
(B) approve Bar Counsel’s disposition;
(C) reject Bar Counsel’s disposition and dismiss the matter;
(D) recommend a modification and remand the matter to Bar Counsel for
disposition; or
(E) recommend the filing of Formal Charges.
I.B.C.R. 509(d)(5).
Where Bar Counsel determines a violation has occurred, he or she has the option of
imposing an “informal” sanction—such as a private reprimand—or filing “formal charges.”
When Bar Counsel takes the former approach, a hearing committee’s role is to review such a
decision for error, not to make independent findings. Nothing in I.B.C.R. 509(d) requires a
hearing committee to issue independent findings of fact or conclusions of law when approving
Bar Counsel’s imposition of a private reprimand. By contrast, when Bar Counsel pursues formal
charges, he or she files a formal complaint and the case is assigned to a hearing committee.
I.B.C.R. 511(b)–(c). Then, a hearing is held before the hearing committee, and upon conclusion
of the proceedings, “the Hearing Committee shall issue its findings of fact, conclusions of law
and recommendations.” I.B.C.R. 511(g)–(h). If the hearing committee finds a violation, it may
recommend a public reprimand, public censure, suspension, or disbarment. I.B.C.R. 511(i)–(j).
A plain reading of the Bar Commission Rules indicates that a hearing committee is
required to make independent findings of fact and conclusions of law when assigned a “Formal
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Charge” under I.B.C.R. 511, but not when reviewing the Bar Counsel’s imposition of an
informal sanction under I.B.C.R. 509(d). As this Court has stated on several occasions, the
purpose of requiring formal findings of fact and conclusions of law is to facilitate judicial
review. Intermountain Health Care, Inc. v. Bd. of Cnty. Comm’rs of Caribou Cnty., 108 Idaho
757, 761, 702 P.2d 795, 799 (1985). Where, as here, Bar Counsel has provided a detailed
description of the background of the action and specific findings to support his conclusions,
meaningful review is possible. When acting in its appellate capacity, a hearing committee should
be able to adopt Bar Counsel’s findings and conclusions in whole. Although the Committee’s
decision does not expressly state that it adopted Bar Counsel’s findings and conclusions, such an
adoption can be inferred from the Committee’s approval of Bar Counsel’s decision in toto.
Accordingly, we conclude that the Committee did not err by failing to issue independent
findings of fact and conclusions of law when approving Bar Counsel’s imposition of a private
reprimand.
B. The Hearing Committee did not err in affirming Bar Counsel’s conclusion that Doe
violated I.R.P.C. 3.3.
I.R.P.C. 3.3(a)(1) provides that “[a] lawyer shall not knowingly . . . make a false
statement of material fact or law to a tribunal or fail to correct a false statement of material fact
or law previously made to the tribunal by the lawyer.” Comment 10 to I.R.P.C. 3.3 further
provides that the prohibition against providing false evidence also requires a lawyer to take
“reasonable remedial measures” where a lawyer has provided material evidence with the belief it
was true but later learns that the evidence is false. Comment 8 to I.R.P.C. 3.3 explains that “[t]he
prohibition against offering false evidence only applies if the lawyer knows that the evidence is
false. A lawyer’s reasonable belief that evidence is false does not preclude its presentation to the
trier of fact. A lawyer’s knowledge that evidence is false, however, can be inferred from the
circumstances.”
Doe argues that the Committee erred in affirming Bar Counsel’s conclusion that he
violated I.R.P.C. 3.3(a)(1) because “[a]t no stage in the Federal Court proceedings or in the
proceedings before the Bar has anyone, tribunal or counsel, found the existence of a ‘false
statement’ or an ‘uncorrected false statement.’” In his reply brief, Doe argues that Rule 3.3(a)(1)
does not require “an attorney to tell the court that statements, which were true when made, are no
longer true” and that there is no evidence Doe knew statements he made about Miller’s unsigned
declaration were false. Doe also argues that any differences between Miller’s unsigned
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declaration and his signed affidavit were not material so Doe was not required to disclose the
signed affidavit.
Bar Counsel expressly found that Doe made false statements to the tribunal by continuing
to rely on the unsigned declaration after receiving the signed affidavit and representing to the
court that Miller was unwilling to sign an affidavit when he had already done so. I.R.P.C. 3.3(a)
recognizes that an attorney has a duty to take reasonable remedial measures where he or she has
provided information to the court that later turns out to be false, even if the attorney believed that
the information was true at the time it was provided. I.R.P.C. 3.3 cmt. 8. Doe filed Miller’s
unsigned declaration on March 25, 2011. Doe received a copy of Miller’s signed affidavit in
May 2011. However, Doe did not disclose the signed affidavit to the court, and he continued to
rely on the unsigned declaration to support Plaintiffs’ third amended complaint and Plaintiffs’
motion to amend the complaint, and to defend against Defendants’ renewed motion to dismiss
and Defendants’ motion to strike Plaintiffs’ motion for partial summary judgment.
Bar counsel also found that the differences between the unsigned declaration and signed
affidavit were material. Bar Counsel concluded that Miller omitted several statements in the
signed affidavit that were included in the unsigned declaration:
Miller omitted from the signed affidavit references to [Dean] Paauw, including
Paauw’s purported comment that he feared criminal liability but was “not in jail
yet” based on the actions of C&W and/or Credit Suisse. Miller also omitted
language from the Signed Affidavit stating that: (1) his former C&W supervisor,
[Charles] Reinegal, refused to review his working papers from a prior project; (2)
C&W appraisers knew the relevant appraisals were not FIRREA compliant; (3)
there were discussions and emails between the appraisers about how the TNV
valuation was not compliant with USPAP; and (4) he flew to Los Angeles to meet
with Credit Suisse executives “due to [his] concerns” about the appraisals and
“was assured by the Credit Suisse team that the appraisals were not being used to
mislead…”
Bar counsel also found that after Doe was in possession of the signed affidavit, he filed an
opposition to Defendants’ motion to strike Plaintiffs’ motion for partial summary judgment,
which included references to statements from the unsigned declaration that were omitted from
the signed affidavit. The fact that Doe had the signed affidavit in his possession when he relied
on omitted statements from the unsigned declaration present circumstances from which Doe’s
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knowledge that the evidence was false could be inferred.2 Additionally, Doe’s reliance on
statements omitted from the signed affidavit supports Bar Counsel’s finding that the documents
were materially different. The record discloses that there were substantial differences between
the two documents. Even if every difference was not material, where a lawyer has presented the
court with an affidavit or declaration that is not signed and tells the court that the declarant or
affiant is unwilling to sign the document, when the lawyer receives a signed declaration or
affidavit from the individual, it is not clear why the lawyer would not feel compelled to
immediately advise the court that the reluctant affiant or declarant has changed his or her mind
and put signature to paper.
In sum, there was substantial evidence to support Bar Counsel’s conclusion that Doe
violated I.R.P.C. 3.3(a)(1), and the Committee’s affirmance of his decision was not clearly
erroneous.
C. The Hearing Committee did not err in affirming Bar Counsel’s conclusion that Doe
violated I.R.P.C. 8.4(d).
I.R.P.C. 8.4(d) provides that it is professional misconduct for a lawyer to “engage in
conduct that is prejudicial to the administration of justice.” On appeal, Doe argues that Bar
Counsel’s determination that he violated I.R.P.C. 8.4(d) was based entirely on Counsel’s finding
of a violation of Rule 3.3. Bar Counsel concluded that Doe violated I.R.P.C. 8.4(d) because his
actions “unnecessarily and unreasonably multiplied the proceedings, and required the
expenditure of ‘additional resources’ by the parties and the Court.”
In ruling on Defendants’ renewed motion to dismiss and Plaintiffs’ motion to amend,
Judge Bush and Judge Lodge relied on Miller’s statements from the unsigned declaration. The
court and Defendants did not become aware of the signed affidavit until Miller’s counsel emailed
the affidavit to C&W’s counsel, who then filed the affidavit with the court. Doe failed to disclose
the existence of the signed affidavit for almost a year. During that time, the court ruled on
several of the parties’ motions, relying in part on information in the unsigned declaration. The
2
Doe argues that the statements in the unsigned declaration were not false because Miller affirmed the truth of the
statements when he was deposed on May 31, 2012. A transcript of the deposition has not been included in the record
so there is no way for the Court to verify this contention. “[T]he disciplined attorney bears the burden of proving the
evidence does not support the factual findings.” Wilhelm v. Idaho State Bar, 140 Idaho at 30, 34, 89 P.3d 870, 874
(2004). Bar Counsel gave little weight to this argument: “That Miller may have affirmed the truth of the omitted
statements during his deposition, an account which the Defendants disputed, did not obviate [Doe’s] responsibility
under I.R.P.C. 3.3 to advise the Court not to rely upon the omitted statements in the Unsigned Declaration after May
4, 2011.”
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parties and the court spent substantial time considering and responding to false information
presented by Doe. The proceedings were multiplied as a result, including necessitating
reconsideration of Judge Lodge’s order on Defendants’ motion to dismiss and Plaintiffs’ motion
to amend after Defendants learned of the existence of the signed affidavit.
The foregoing provides substantial evidence to support Bar Counsel’s conclusion that
Doe’s failure to disclose the signed affidavit for a prolonged period was prejudicial to the
administration of justice. Accordingly, we conclude that the Committee did not err in affirming
Bar Counsel’s decision.
V.
CONCLUSION
For the foregoing reasons, the Court affirms the Hearing Committee’s affirmance of Bar
Counsel’s decision to impose a private reprimand against Doe. Costs to Respondent.
Justices EISMANN, BURDICK, W. JONES and HORTON CONCUR.
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