Legal Ethics Forum

Procedural missteps foil lawyer’s whistleblower protection claims against Vanguard

            In May of 2013, lawyer David Danon brought a whistleblower award (qui tam) case against his then-employer, Vanguard, suing on behalf of New York State regarding taxes that Danon believed Vanguard owed the state. As Nancy Moore & I discussed here, a New York trial court dismissed Danon’s qui tam case in November 2015 because it found that he violated New York’s confidentiality standard for lawyers.

            In that lawsuit, Danon also claimed that Vanguard illegally retaliated against him because of his internal whistleblowing activity, but the New York court dismissed that claim as well, finding that Danon did not plead that his internal whistleblowing occurred prior to Vanguard’s decision to terminate him; and that even if Danon’s internal whistleblowing did precede Vanguard’s termination decision, Vanguard was free to fire him for that internal whistleblowing because “as a tax lawyer for Vanguard, Danon's job duties included ensuring that [Vanguard] complied with federal and state tax laws.” (The existence of a “job duties” exception to whistleblower protection is a continuing theme in whistleblower cases, and was key to the Supreme Court’s 2006 decision addressing the First Amendment rights of a lawyer-whistleblower in Garcetti v. Ceballos.)

            In addition to Danon’s New York state court suit against Vanguard, he also sued Vanguard in federal district court in Philadelphia, claiming protection under two federal statutes, the Dodd-Frank Wall Street Reform and Consumer Protection Act, 15 U.S.C. § 78u-6(h)(1), Sarbanes-Oxley, 18 U.S.C. § 1514A, and Pennsylvania’s Whistleblower Law. 43 P.S. § 1421 et seq. Danon’s case teed up two important issues: (1) whether whistleblower protection standards apply differently to lawyers in light of their legal ethics obligations and (2) whether Dodd-Frank’s protections apply to an employee’s internal whistleblowing, as the SEC argued in an amicus brief filed in the case.

            On May 25, Federal District Court Judge C. Darnell Jones ruled against Danon, but did not reach either of these issues or the merits of the case. Instead, the court relied on collateral estoppel, finding that Danon could not re-litigate the causal connection between his internal whistleblowing and Vanguard’s decision to terminate because he already had an opportunity to litigate that before the New York state court and lost on that issue. In addition, the court ruled that Danon’s Sarbanes-Oxley claim was barred because he had not shown that he filed an administrative complaint with the Occupational Safety and Health Administration, as required by that statute. It also ruled that Danon’s Pennsylvania Whistleblower Law claim was barred because he missed the 180-day statute of limitations under that statute.

            David Danon’s saga illustrates the significant procedural hurdles that whistleblowers face in litigating their whistleblower protection claims.

A Response to Ilya Somin on Justice Sotomayor's Endorsement of Mandatory Pro Bono Programs

[Cross-posted on The Faculty Lounge]

Writing on the Volokh Conspiracy, Ilya Somin takes issue with Justice Sonya Sotomayor’s recent endorsement of mandatory pro bono by lawyers. (Reported here; non-paywalled summary here.)  Ilya was especially troubled by Justice Sotomayor’s comment that she believes in “forced labor” when it comes to providing legal access for the poor, even though the statement seems obviously intended as a wry metaphor.  Somin, however, took it seriously, comparing mandatory pro bono programs to slavery and communism.  

Missing entirely from Somin’s analysis is the fact that mandatory pro bono plans are always proposed as a condition of licensure – in other words, an exchange that is “forced” on no one except those who freely enter the profession.  That may not make mandatory pro bono a good idea, but it certainly takes it far out of the realm of involuntary servitude (unless, that is, you are among those who believe that taxation is presumptively theft).

Somin goes on to raise a slippery slope argument:

If we can impose [public service] on lawyers in order to provide legal services to underserved populations, why not on members of other professions, anytime we think forcing them to do additional work might benefit some underserved group or promote some other societal interest? (Emphasis added.)

But let’s look at actual proposals for pro bono obligations, which turn out to be incredibly modest.  The ones with which I am familiar call for 10-20 hours per year, to be performed at each lawyer’s convenience.  So it is not “anytime” and it is not much “additional work.”  In fact, the proposals typically call for something between 0.5% and 1.0% of a lawyer’s time, in exchange for the privilege of practicing law.  In concept, I see nothing wrong with extending a similar obligation to other professions, such as physicians, although our current system of public benefits – along with the medical profession’s long-standing tradition of volunteerism – makes that unnecessary.

Finally, Somin brings up the canard that “forced labor is unlikely to be a good way to improve legal services for the poor.”  Thus,

As experience in the communist world and elsewhere repeatedly demonstrates, forced laborers rarely do good work – especially if the task involves complex professional services where there are many corners that can potentially be cut. Here’s a piece of free (though not forced!) legal advice for my readers: if you are on trial for your life, your liberty, or even just a large sum of money, you probably do not want to be represented by a lawyer who only took the case because the government forced him to do so.

This is a complete red herring.  There are plenty of lawyering tasks that are helpful to the poor, but do not involve especially complex professional services.  No pro bono plan contemplates drafting unwilling lawyers to conduct trials in which life and liberty are at stake, and it is simply misleading to pose that in a parade of horribles.  Instead, lawyers would be given complete control over their pro bono caseload, with nobody required to step out of his or her comfort zone.

Pro bono work could include such matters as drafting simple wills, reviewing leases, handling uncontested divorces, and negotiating with welfare agencies.  Law school clinics regularly teach that stuff to second year students, who typically become quite capable by the end of the third semester.  Any lawyer who cannot do the same should not be practicing law.

Would lawyers nonetheless “cut corners” on pro bono cases?  I don’t think so.  There is such a thing as professional pride, and most lawyers of my acquaintance care about the quality of their work product, even in small matters.  Once a pro bono obligation became routine – something done every year, though only for a day or two – lawyers would certainly choose tasks that they can perform well and carefully.

Let me add one more consideration:  Ilya asserts that “If forced labor can be justified at all, it can only be in situations where it achieves some great good that cannot possibly be realized in other ways.”  The phrase “cannot possibly be achieved” does a lot of work in this argument, as Somin seems to contend that pro bono obligations can never be imposed so long as there is some other conceivable way to accomplish the same end.  Of course, there is always a “possible” alternative, even if it is economically unfeasible or politically impractical.  That is why judicial systems and bar associations (depending upon the jurisdiction) are empowered to select the most pragmatic solution to a problem, even if it is not the theoretically last resort.

And in any case, mandatory pro bono programs do offer a public benefit that cannot be achieved in any other way.  As we have seen over and over again, poor people are often confronted by local courts that abuse or disregard their rights in areas such as juvenile law, housing and eviction, consumer collections, civil forfeitures, and imprisonment for non-payment of fines.  For the most part, these practices flourish when they take place out of the public eye.  They are more likely to be exposed, and therefore remedied, when private lawyers regularly show up in those same courts. 

There are, as Somin points out, other ways to increase the provision of legal services to the poor and middle classes.  I agree with him that they should be tried.  A modest pro bono requirement, however, would be good for everyone.

What Would Nino Do?

Charlie Geyh (Indiana-Bloomington) and I have an oped today in The National Law Journal about the Merrick Garland nomination.  There is an un-paywalled version here.

Here is the gist of the piece:

But if the Senate Republicans won’t listen to Democrats — or even to the majority of Americans who want Garland to get a hearing — perhaps they will pay attention to the words of several Supreme Court justices, past and present, who have warned about the problems created by an eight-member court.

We then provide the past comments of Justices Roberts, Rehnquist, and Scalia on the undesirability of proceeding at less than full strength, even in a single case.