A GREAT WEEK FOR ATTORNEYS RIGHTS!!! Kentucky Supreme Court and Board of Governors Act Quickly to Limit Bar Counsel Actions

Every attorney in Kentucky should express their gratitude to the Kentucky Supreme Court and the KBA Board of Governors,
for actions taken this week in response to complaints from different sources alleging abuse of attorney’s rights by the KBA Bar Counsel’s Office.

Tthe Kentucky Supreme Court in a special meeting on Nov. 15, 2011, amended SCR 3.370.  The Supreme Court, without a dissenting vote, amended SCR 3.370 (8) by deleting a provision of the old rule
which required an attorney who had been sanctioned by the Board of Governors to post a 100% surety bond before he had the right to appeal his conviction to the Supreme Court.
This  has not been much of an issue until recently when the current Bar Counsel, Linda Gosnell, started a new practice of tacking “attorney fees” to her “cost and expense” bills.

In recent cases the amount claimed by the Bar Counsel  under the rule  which allowed the Bar Counsel to certify the “costs and expenses” in discipline caseas “costs”  appear to have skyrocketed.  Examples of such “cost” bills include as $40,000 in the David Helmers Case,  $18,800 in the Judge Bamberger case, and $52,900 in the Eric Deters case.

LawReader has previously posted several articles on the impropriety of the Bar Counsel adding “attorney fees” to their bill for “costs and expenses”.  Kentucky case law has strictly limited the award of attorney fees to cases in which a statute or rule specifically authorizes the award of attorney fees.   No such rule exists in the Supreme Court Rules concerning ethics prosecutions.

The most egregious claim  made by the Bar Counsel which has been disclosed, was in the Deters case.  The KBA in response to a motion filed by Deters and his attorney Larry Forgy of Lexington, determined that the Bar Counsel had hired outside counsel, (Stites and Harbison) to represent the KBA in a Federal District Court action filed by Deters.  Stites and Harbison charged $44,000.  It is argued that while their motion to dismiss Deter’s federal complaint against the KBA was successful, that the matter only required the filing of one or two motions and attending one or two hearings in Covington.

Federal District Judge Danny Reeves quickly determined that the Federal Courts have no jurisdiction to hear constitutional rights claims filed by an attorney against a Bar Association.   Judge Reeves decision is currently on appeal
to the 6th. Cirt. Court of Appeals.

A similar lawsuit was filed by the ACLU in John M. Berry’s lawsuit against the KBA. This Federal suit against the KBA,  relates to the Bar Counsel’s Office attempt to deny Berry the constitutional right to freely express his opinions about an action taken by the Legislative Ethics Commission. (Berry wrote a letter to the Legislative Ethics Commission expressing his opinion that their acquittal of Senate President David Williams was not supported by law.  The Commission reasoned that Senator Williams was not liable for the improper acts of his employees.  This reasoning appears to be contrary to the age old Respondent Superior Doctrine.

Berry’s letter was polite, non threatening, and was non profane.  But it upset at least one member of the Legislative Ethics Commission.  It has been reported that former Court of Appeals Judge Paul Gudgel, who now serves on the Legislative Ethics Commission called Linda Gosnell, the current Bar Counsel, and sought her assistance in filing an ethics complaint against John M. Berry Jr. over his letter.)
LawReader has reported on this case extensively.  The author of this report published a book titled, Alice vs. Wonderland in 2011, which is a fictional novel loosely based on the John  Berry case.

Many in the legal community who have looked at the reasoning of Judge Reeves ruling in the Deters and Berry cases, note that his finding that “attorneys had no right to seek civil rights review in Federal Court for violation of their constitutional rights by a state Bar Association” , apparently failed to consider long established rulings which uphold the jurisdiction of Federal Courts to hear such claim.  (See footnote citations.)

Other cases where constitutional review by the Federal Courts of State Bar Rules include Dan Taylor vs. the KBA, and Getty vs. Chief Justice Scott Reed.   These rulings from the 1970′s, bring in question the ruling of Judge Reeves, and
indicate a strong likelihood that the Deters appeal and the Berry appeal may both be sustained by the 6th. Circuit Court of Appeals.  The Taylor and Getty rulings clearly upheld the right of the Federal Courts to review unconstitutional State Bar rules.

More recently, In a case involving a rule of the Judicial Conduct Commission, the 6th. Circuit Court of Appeals remanded a dismissal of Marc Carey’s claim on several issues, which are still pending in Federal Court in Lexington.  The 6th. Circuit  accepted jurisdiction and overruled the theory advanced by by a Federal Judge that the Federal Courts had no jurisdiction in such matters.

These three pending cases could result in substantial awards against the Judicial Branch (and in two of the cases against the KBA).  Section 1983 Federal Civil Rights actions specifically provide for an award of attorney fees if the KBA loses.

U.S. District Judge Coleman who sits in Lexington, is currently considering findings in the Marc Carey lawsuit, and it is conceivable that the Kentucky Judiciary acting through the Judicial Conduct Commission might be subject to an award of attorney fees in behalf of Carey.  Some close to the Carey case have speculated that there is a claim by Cary for up to $300,000 in legal fees which could be awarded to him.  The 6th. Circuit found two JCC rules unconstitutional.  (The Kentucky Supreme Court makes the rules for the Judicial Conduct Commission and for the  Kentucky Bar Association.)

One question will undoubtedly be asked of the KBA Board of Governors in the Deters and Berry cases.  Did the Bar Counsel make any effort to meet with opposing counsel and try to avoid the great expense of defending the KBA before the 6th. Circuit in cases that subject the dues paying members of the Ky. Bar Association to a potential of hundreds of thousands of dollars in costs and attorney fees? Or did the Bar Counsel, Linda Gosnell unilaterally decide to participate in the Federal Court actions without permission of the Board of Governors?

Why has the Bar Counsel’s Office  not admitted they were wrong to investigate Berry and place a warning letter in his personnel file?  Why don’t they come clean and admit that they were wrong. Why don’t they apologize, and recognize the free speech rights of attorneys?  If they weren’t so focused on stubbornly covering up their actions, they might save the KBA hundreds of thousands of dollars.  We can’t imagine a ruling  by the 6th. Circuit that says that an attorney cannot ethically write a letter critical of the legislature.

(The members of the Bar currently pay $4,500,000 in annual dues.  The KBA’s largest expenditure is the budget of the Bar Counsel’s office which has 24 employees.  Their budget is $1,600,000 annually.  Don’t be surprised if Berry and The ACLU win before the 6th. Circuit  and that on remand a large attorneys fee bill is imposed on the KBA i.e. on dues paying members of the Bar. )

We note that the Berry appeal, being handled by the Kentucky Branch of the ACLU, involves an infringement of Berry’s first amendment rights and has a very good chance of success.

One must ask, when the Bar Counsel’s office  became aware of Berry’s action in Federal Court, what efforts did they take to work out a settlement with Berry and the ACLU?

It should be noted that the Board of Governors was never involved in the Berry case.   The Bar Counsel investigated Berry for almost two years before dismissing the investigation. Even though no charge was filed the Bar Counsel placed a warning letter in his KBA personnel file without ever obtaining an “indictment” from the Inquiry Commission, and without the matter ever being tried before a Trial Commissioner, and without any review of the Board of Governors.

Whenever the KBA gets sued in Federal Court one would think that the Board of Governors would review the financial risk to the KBA, and at least evaluate a mediation of the claim.  We don’t know of any procedure which requires the Bar Counsel to advise the Board when they are being sued, but the Board clearly has authority to ask the Bar Counsel why they are being sued.

This week it was revealed that the Bar Counsel had authorized the hiring of an outside Louisville Law Firm, (Stites and Harbison).  We have found no SCR which authorizes the Bar Counsel’s Office to  unilaterally hire outside counsel.   (Note:  The Bar Counsel’s Office currently has nine lawyers on staff and a total of 24 employees, and an annual budget of $1,600,000.)
The Supreme Court Rules do authorize the Board of Governors to hire such legal assistance as they determine is necessary. Is it possible that the Bar Counsel did not obtain permission to hire outside counsel in the Deters case.  Are there other cases in which the Bar Counsel chose not to use its own staff of nine lawyers, and instead farmed out the case to Stites and Harbison of Louisville or to some other law firm?

On November 18, 2011, the Board of Governors considered a motion filed by Eric Deters which questioned the “cost bill” demanded by the Bar Counsel of $52,900.   The Supreme Court Rules allow the Bar Counsel to seek restitution of any “costs and expenses”.  The Rule does not specifically authorize an award of “attorney fees” to the KBA.  Deters was acquitted of 15 of l9 charges filed against him.   But on Nov. 18, 2011, the Board of Governors
granted a review of the “cost and expense” claim of the Bar Counsel, and determined that $44,000 of the $52,900 cost bill imposed on Deters, was a legal fee incurred by the Bar Counsel for the outside legal services of a large Louisville law firm.

We would ask the Board of Governors if they authorized the Bar Counsel to employ outside counsel.   The action of the Board disallowing the award of  $44,000 in attorney fees paid to Stites and Harbison, seems to indicate that the Bar Counsel did not seek permission from the Board of Governors to hire outside counsel.

If the Bar Counsel acted without legal authority to incur $44,000 in outside legal expenses, it is logical to expect that the conduct of the Bar Counsel will be closely reviewed by the Board of Governors.  One wonders if these actions of the Supreme Court and the Board of Governors suggest that  Bar Counsel Linda Gosnell’s job on the line?

The $44,000 fee earned by Stites and Harbison will likely be paid  out of the dues paid by kentucky’s 16,700 lawyers.

One of the results of the Bar Counsel submitting a “cost and expense” demand, was the requirement in SCR 3.370 that this demand by the Bar Counsel, must be paid or at least a 100% surety posted before the defendant attorney had the right to appeal their conviction to the Kentucky Supreme Court.

This strange rule (adopted in 1990) in effect gave the prosecutor the power to limit an attorneys right to appeal his ethics conviction.   LawReader has received reports that at least two attorneys could not afford the “cost bill” imposed on them, and were denied the right to appeal to the Supreme Court.

This week, after Deters filed a motion through his attorney Larry Forgy, demanding a hearing on the imposition of a “cost” bill of $52,900, the Board of Governors surprised everyone by actually granting a review of the Bar Counsel’s cost bill.   This is believed to be the first time that anyone challenged this rule.   The Board of Governors found on Nov. 18, 2011 that the claim of $44,000 for the outside legal fee of Stites and Harbison, authorized by the Bar Counsel, and included in her “cost” bill demand, was improper, and the Board disallowed that claim for $44,000.
Three days before the Board’s review of the cost bill imposed on Deters, the Kentucky Supreme Court met in a special session and amended the language in SCR 3.370 sections (6) and (8), and removed the language which mandated that “costs” claimed by the Bar Counsel must be paid before the defendant attorney had the right to appeal to the Supreme Court.

In deleting this provision in Section (8) the Supreme Court protected their right to determine who has the right to appeal.   This new amendment removed the power of the Bar Counsel to determine who could appeal to the Supreme Court.

In amending SCR 3.370(6) the Supreme Court also extended the time period in which the Board of Governors had to make a written ruling regarding their findings in ethics cases, from 30 days to 45 days.   Deters claimed that the written ruling in his case was filed by the Board of Governors five days late.  The new Section (6) will allow an additional l5 days for the Board to file their written findings.   Since the full Board of Governors only meets once a month, this amendment is certainly justified.   Whether this amendment will affect Deters claim of a late filing by the Board is yet to be determined.

The bottom line is that the Kentucky Supreme Court upon being informed of the abuse of SCR 3.370 by the Bar Counsel, acted very quickly and protected their constitutional right to determine who has the right to an appeal, and to protect the rights of attorneys to their constitutional right to have at least “one appeal”.

The action of the Board of Governors in denying the outside attorneys fee of $44,000 as a claim against Deters, suggests that the Board is not going to be a rubber stamp for the Bar Counsel.

These actions of the Supreme Court and the Board of Governors are a giant step towards granting due process and fairness to the enforcement procedures of the attorney discipline process.

More work must be done.  The Board of Governors, which is the administrator of the Bar Counsel’s office, should in our opinion clearly establish a policy which determines whether they will give the Bar Counsel a blank check to spend KBA funds at their discretion, to hire outside counsel without permission of the Board, and whether or not the Board will review procedures of the Bar Counsel’s office.

One might ask, why does the Bar Counsel need to hire outside counsel when they already have on their staff nine attorneys, numerous para legals and legal assistants.  If those staff members are not qualified to
handle motions in Federal Court perhaps the Board should use their clear authority to hire and fire employees of the Bar Counsel’s office, and to find some attorneys who have the talent to handle motions in the Federal Courts.

The KBA website indicates that one of the members of the Board of Governors is employed by Stites and Harbison.  It is not known by this author  if that Board member was present at the Nov. 18th. hearing on Deters motion regarding his objection to the $52,900 “cost” bill which included $44,000 for Stites and Harbisons work for the Bar Counsel’s office.

AMENDMENT OF SCR 3.370 (6) AND (8):

Section (6) grants the Board of Governors 45 days to issue a final written decision in discipline case.  This is an increase of l5 days.

Section (8) deletes the requirement that a defendant attorney cannot file an appeal of a Board’s Ruling to the Supreme Court until he has paid the “cost and expense” bill claimed by the Bar Counsel.

Other cases where constitutional review by the Federal Courts of State Bar Rules include Dan Taylor vs. the KBA, and Getty vs. Chief Justice Scott Reed.


The following cases establish the right of the Federal  Courts to review constitutional violations in State Bar Rules:
Getty v. Hon. Scott Reed, Chief Justice   413 F.Supp 511   Marcy 12, 1976

Dan Taylor III vs. Kentucky Bar Association   424 F.2d 478 (l970)


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