Ninth Circuit suspends Walter Lack, reprimands Thomas Girardi

Here's something you don't see every day.  The Ninth Circuit suspended Walter Lack from practicing before that court for six months and reprimanded Thomas Girardi.  

In a nutshell, following a defective judgment abroad against a non-existent Dole entity (in a case where a Dole affiliate tried to appear but was rejected by the court because it was not the entity mentioned in the defective complaint), the well-known plaintiffs lawyers tried to have a $489 million judgment enforced in the US against the real, big Dole entity.  The briefing, authored by the Lack firm, was false because it relied upon translations that masked the failure to name and secure a judgment against the correct entity.  Girardi's firm signed on to the brief although he hadn't read it.  When Dole filed its opposition papers, an associate in the Lack firm advised that they drop the appeal.  The associate was over-ruled and participated in further briefing.  A more senior lawyer was asked to argue the merits before the Ninth Circuit but after 6-8 hours of preparation for the argument he concluded that the appeal should be dropped because of the defective judgment.  Although the opinion runs 77 pages including the Special Mater's Report, it's worth reading.  (The ALM article is under a paywall.)

UPDATE: Because the case involved a Special Master (Judge Tashima) and an Independent Prosecutor with deep knowledge of legal ethics (Prof. Rory Little, of Hastings), we have an unusually deep record. Some key points: 

• Two lawyers "blew the whistle" internally: (1) an unnamed associate who then was instructed to work on the next brief on the matte; and (2) a more senior lawyer, Howard Miller, who advised the supervising partners to drop the appeal and then apparently did not continue to advance the baseless claims.  Those facts are useful for thinking about the ability of lawyers to assert their personal views about ethical issues even when immersed in situations where there is pressure to keep moving along the same (unethical) path.
• Here is the key passage as to the junior associate: "With respect to the Lack firm Respondent, whom we have identified simply as 'the junior associate,' we find additional mitigating factors.  The ABA Standards identify inexperience in the practice of law as a mitigating factor, see Standards [sec.] 9.32(f), but we are more influenced by his earnest, albeit unsuccessful, effort to persuade his more-experienced colleagues not to continue their frivolous appeal.  We will privately reprimand the junior associate for allowing his superiors to overcome his sounds instincts and for his role in drafting briefs that contained false statements." (10011)
• The name partner at one of the plaintiffs firms, Thomas Girardi, escaped more severe sanctions because he did not read the brief that bore his signature.  He had authorized the other firm to sign his name on the briefs for him.  The Ninth Circuit suggested that that was perhaps sanctionable in another forum. (10009)
• The court recognized that the culpability of the lawyers probably grew over time as they learned more and more about the defective foreign judgment upon which they were relying.  (10004)  Without approving of that conduct, one can imagine how some of the lawyers succumbed to a "sunk cost" or "in for a penny, ..." mentality.  But the court correctly noted that the duty to investigate is a continuing one and that lawyers must be cognizant of changed circumstances.
• For the duty of candor to the tribunal, the court relied upon MR 3.1; CRPC 5-200; and Cal. Bus. & Prof. Code sec. 6068(d).  I haven't checked this in a while, but was formerly my understanding that while the US District Courts in California incorporated the California rules, the Ninth Circuit did not.  Regardless, when the appeal relies upon a false document, choice of law issues are not going to help.

Comments

[appealingvegas]

Judge Manella's order dismissing the action in 2003 lists Howard Miller as counsel, at that earlier point in time. The panel seems to believe he was not even aware of the mischief until shortly before the appeal was to be heard. The discipline of Sean Topp was overboard and fails to indicate what he should have done beyond what he did. He may have done initial drafts before he woke up, but he is not to be faulted for that. He did not sign the papers. Would the outcome have been different if the big guys had just hung fire and argued it? By dismissing the appeal, they hemorrhaged blood in the water and the sharks had a feast. They played a dangerous game and paid the price. In Nicaraguan jurisprudence, there is likely not a difference between a company versus a corporation.