|FOR RESPONDENT |FOR THE INDIANA SUPREME COURT |
|JOHN P. COALE |DISCIPINARY COMMISSION |
| | |
|Robert W. Hammerle |Donald R. Lundberg, Executive |
|Indianapolis, Indiana |Secretary |
| |Charles M. Kidd, Staff Attorney |
| |115 West Washington Street, Suite 1165|
|FOR RESPONDENT |Indianapolis, IN 46204 |
|PHILLIP B. ALLEN | |
| | |
|No appearance. | |
IN THE
SUPREME COURT OF INDIANA
IN THE MATTER OF )
) CASE NO. 98S00-9303-DI-309
JOHN P. COALE and )
PHILLIP B. ALLEN )
DISCIPLINARY ACTION
July 29, 2002
Per Curiam
Because the respondents, both of whom are attorneys licensed in states
other than Indiana, solicited potential clients in this state without
complying with our rules governing client solicitation, we find today that
they should be barred from engaging in acts constituting the practice of
law in this state until further order of this Court.
This matter was instituted with the Disciplinary Commission’s Verified
Complaint for Disciplinary Action, which contained two counts. The first
count alleged that the respondents’ written solicitations of potential
clients violated the Rules of Professional Conduct for Attorneys at Law.
The second count, in the alternative, alleged that the respondents engaged
in the unauthorized practice of law in this state. Pursuant to
Ind.Admission and Discipline Rule 23(11), this Court appointed a hearing
officer who, after hearing, submitted to this Court his findings of fact
and conclusions of law. At hearing, the evidence submitted consisted
solely of the Commission’s verified complaints for disciplinary action, the
respondents’ answers thereto, and supporting briefs. Respondent Allen did
not appear at hearing.[1] Respondent Coale appeared at hearing and,
pursuant to Admis.Disc.R. 23(15), has petitioned this Court for review of
those findings. Pursuant to this Court’s directive, the Commission has
filed a response brief to the respondent’s petition for review. Where a
respondent petitions this Court for review of the hearing officer’s report,
our review is de novo in nature and entails a review of the entire record
presented. Matter of Barratt, 663 N.E.2d 536 (Ind. 1996).
Respondent Coale is an attorney licensed in the District of Columbia.
Respondent Allen is an attorney licensed in the state of California.
Neither is or has ever been admitted to the practice of law in the state of
Indiana. Neither has ever sought or obtained admission to the Indiana bar
pursuant to a pro hac vice appointment, pursuant to Admis.Disc.R. 3(2).[2]
The hearing officer found that this case involves the crash of a
Kentucky Air National Guard Cargo Plane into certain buildings and public
areas in Evansville, Indiana on February 6, 1992. In addition to the air
crew members who died, at least 11 people were killed and several other
people injured as a result of the crash. By their own admission, the
respondents sent videotapes, personal letters and folders containing
information about their law firm and a firm brochure to seven people who
were widows, widowers or surviving parents of the crash victims or to the
crash victims themselves. The hearing officer found that these letters,
tapes and folders were sent for the express purpose of attempting to obtain
the people receiving the information as clients and were soliciting their
business. The material did not include the words “advertising material,”
and the respondents did not send the material to the Disciplinary
Commission prior to the time they sent it to the prospective clients. The
material did contain the following text, apparently in reference to other
disasters:
“John Coale and Phil Allen came to the aid of thirteen (13) of the
victims or their family winning compensation among the highest awards
for the case.”
“John Coale and Phil Allen represented the families of nine (9) of the
victims, helping them through this tragedy and winning for them
substantial compensation for their tragic loss.”
“ . . . the settlement sum is reported to be the largest product
liability settlement in U.S. history . . .”
“Phil Allen worked with Plaintiff’s steering committee, filing motions
and briefs getting the case ready for trial. The result was a hundred
and eighty million dollar settlement ($180,000,000), the largest for a
personal injury class action suit at the time.”
“John Coale represented families of those killed in the blaze as well
as several of those injured. His work help [sic] lead to over two
hundred and twenty five million dollars ($225,000,000) in compensation
for Plaintiffs in this case.”
At the outset, we note that Respondent Coale argued both at hearing
and again in his petition for review of the hearing officer’s report that
this Court does not have jurisdiction over him in this case because he is
not a licensed Indiana attorney. We note that this issue was resolved
against other out-of-state respondents in a companion state disciplinary
case and related federal cases. In the Matter of George W. Murgatroyd,
III, and Gerald C. Sterns, 741 N.E.2d 719 (Ind. 2001); Sterns v. Lundberg,
922 F.Supp. 164 (S.D. Ind. 1996) (complaint alleging lack of personal and
subject matter jurisdiction dismissed). Our analysis of this
jurisdictional issue in Murgatroyd we think is applicable to this case as
well:
Notwithstanding the fact that the respondents hold no Indiana law
licenses and therefore are not subject to this Court's usual
disciplinary sanctions for licensed Indiana attorneys who engage in
professional misconduct, any acts which the respondents take in
Indiana that constitute the practice of law are subject to our
exclusive jurisdiction to regulate professional legal activity in this
state. [Footnote omitted] By directing the solicitations to the
prospective clients, the respondents communicated to those persons
that they were available to act in a representative capacity for them
in Indiana courts to address loss or injury associated with the plane
crash. As such, they held themselves out to the public as lawyers in
this state when neither was admitted to practice here. [Footnote
omitted] Those acts constituted professional legal activity in this
state subject to our regulatory authority. [Citation omitted]
Murgatroyd at 721.
Upon his petition for review, filed after the hearing officer’s
findings of fact were filed with this Court, Respondent Coale argues that
the Commission presented no evidence that the respondents sent any
communication to any Indiana citizen. That fact, he argues, precludes this
Court from finding a violation of Indiana’s Rules of Professional Conduct.
It is true that the verified complaint, while listing the names of the
persons to whom the respondents directed the communications, does not
specifically allege that they were residents of Indiana. At the fact-
finding stage of these proceedings, however, Respondent Coale never argued
that the targets of the solicitations were not specifically proven to be
Indiana residents.[3] In his initial answer to the charges, filed on April
9, 1993, Respondent Coale never argued the recipients’ residence.[4] This
case proceeded for some 9 years before the issue of the recipients’
physical location was ever addressed. Upon review of the evidence in this
case, the hearing officer concluded that the targets of the solicitations
were Indiana residents. Accordingly, we find that the record in this case
is sufficient to support the inference that the targets of the respondents’
solicitations were Indiana residents.[5] Further, to allow Respondent
Coale, after the close of the fact-finding stage of these proceedings, to
now argue as a matter of fact that the targets were not demonstrated to be
Indiana residents would be to permit introduction of facts with no
opportunity for the Commission to supplement the record with evidence of
the recipients’ residence. By failing to advance the residence issue until
after the fact-finding stage of these proceedings concluded, Respondent
Coale waived the argument upon review.
Respondent Coale further argues that there is nothing in the record
to indicate that he was involved in any way in sending the offending
materials. The respondents’ answer, agreed by the Respondent Coale to be
evidence in this case, states that the informational materials concerning
his law firm, Coale, Allen & Van Susteren, were sent to the persons listed
in the verified compliant. He argues that “the partner of a small law
firm [like Coale, Allen & Van Susteren] may not be disciplined for the
conduct of an (unidentified) individual affiliated with the firm.” Even
assuming, arguendo, that Coale was not directly responsible for the
dissemination of the solicitations, the respondent is responsible for
another lawyer’s acts if the respondent ratified the conduct involved or
timely knew of conduct taken by a lawyer over whom he had direct
supervisory authority and failed to take reasonable remedial action.
Prof.Cond.R. 5.1(c). Accord, Prof.Cond.R. 5.3, regarding a lawyer’s
responsibilities regarding nonlawyers employed by the lawyer.
Respondent Coale also asserts that these proceedings violate the
respondents’ right to due process because “the court that ultimately will
decide this matter is the entity that demanded the pursuit of the
disciplinary charges against the respondent[s].” He refers to the fact
that on March 9, 1992, Chief Justice Randall Shepard and Justice Brent
Dickson held a press conference during which they called for an
investigation into the advertising and solicitation practices which they
perceived as improper. Because of that press conference, Respondent Coale
argues that this Court is not an impartial tribunal with regard to this
matter, and thus, pursuant to Canon 3 of the Code of Judicial Conduct, must
recuse itself from this matter.[6] We note that we have already disposed
of this argument once in this case. Order Denying Motion to Dismiss,
issued June 25, 1993 (stating that the respondents’ assertion of alleged
judicial conduct does not constitute grounds for disqualification). In
any event, this Court did not direct the filing of a formal grievance
against the respondents here, but merely called for an investigation into
solicitation practices following the airplane crash. The Commission, as a
distinct entity, is empowered to bring a disciplinary action on its own
grievance, and chose to do so in this case. See Admis.Disc.R. 23(10)(a).
A hearing officer appointed by this Court has found misconduct following
hearing. Due process, as applied to disciplinary proceedings involving
attorneys, requires notice of the charges and an opportunity to be heard.
In re Ruffalo, 390 U.S. 544, 88 S.Ct. 1222, 20 L.Ed.2d 117, reh. den. 391
U.S. 961, 88 S.Ct. 1833, 20 L.Ed.2d 874; Matter of Stivers, 260 Ind. 120,
292 N.E.2d 804 (1973); Matter of Wireman, 270 Ind. 344, 367 N.E.2d 1368
(1977). The respondents have been afforded both. We find the respondents’
argument unpersuasive.
Turning now to the substantive allegations of misconduct, Count I of
the complaint alleged that the form and content of the respondents’
solicitations were defective under Indiana rules governing such
communications. As a general proposition of law, the practice of targeted
mail solicitation of prospective clients by lawyers is permitted. Shapero
v. Kentucky Bar Association, 486 U.S. 466, 108 S.Ct. 1916, 100 L.Ed.2d 475
(1988), Murgatroyd, supra. However, the Commission alleged that the
solicitations did not comply with Indiana law governing the content of
lawyer advertising. Specifically, the Commission alleged that the
solicitation letters were not labeled “advertising material,” as required
by Prof.Cond.R. 7.3(c).[7] It charged that they contained statistical
data or other information based on past performance or a prediction of
future success, testimonials about or endorsements of lawyer, and a public
communication which appeals primarily to a lay person’s fear, greed, desire
for revenge, or similar emotion, which statements are prohibited by
Prof.Cond.R. 7.1(d)(2), (3), and (5).[8] It charged that the respondents
did not file the materials with the Commission at or prior to disseminating
them, as required by Prof.Cond.R. 7.3(c).[9] It further charged that the
statements contained false, fraudulent, misleading, deceptive, self-
laudatory or unfair statements or claims, in violation of Prof.Cond.R.
7.1(b).[10] The Commission also charged that the respondents violated the
Rules of Professional Conduct in violation of Prof.Cond.R. 8.4(a) and that
their conduct was prejudicial to the administration of justice in violation
of Prof.Cond.R. 8.4(d).[11] The hearing officer found that the
respondents violated Prof.Cond.R. 7.1(b), 7.1(d)(3), 7.3(c), and 8.4(d).
We agree that the respondents violated the rules, as found by the
hearing officer. Specifically, the respondent’s letters and accompanying
materials were self-laudatory and clearly in the nature of endorsements in
that they, for example, announced that the respondents helped other victims
“through [their] tragedy and winning for them substantial compensation for
their tragic loss” and that they won compensation for other victims that
was “among the highest awards . . .” They also announced in the materials
that Respondent Coale’s work in one case “helped to lead to over
$225,000,000 in compensation for the Plaintiffs . . .” Respondent Coale
contends that the statements were not self-laudatory, but merely factual
and objective. We disagree in that the respondents’ message was not
merely factual but instead contained subjective, favorable judgments as to
the nature of the respondents’ work and of the merits of the respondents’
work in those cases.
Finally, we agree with the hearing officer’s conclusion that the
respondents’ conduct was prejudicial to the administration of justice. The
respondents’ nonconforming solicitations divested the victims and their
families the opportunity to make choices regarding legal counsel on
objective grounds with the benefit of fair, acceptable information about
the legal services they offered.
Having found misconduct, we must now determine an appropriate
discipline for it. As we stated in Murgatroyd, since the respondents are
not licensed in Indiana, our choices of sanction do not include direct
impingement of their law licenses. Murgatroyd, 719 N.E.2d 721. We can,
however, regulate the professional conduct of lawyers which occurs within
the borders of this state. Id. The respondents’ gross violation of this
state’s rules governing solicitation warrants their exclusion of practice
from this state for a period of time in order to ensure that, should they
ever again solicit clients in this state, they will abide by Indiana’s
Rules of Professional Conduct. See, e.g., Matter of Fletcher, 694 N.E.2d
1143 (Ind. 1998) (two year exclusion from pro hac vice admission for
violation of Indiana Rules of Professional Conduct while so admitted).
It is, therefore, ordered that the respondents, John P. Coale and
Phillip B. Allen, are hereby barred from acts constituting the practice of
law in this state (including pro hac vice admission) until further order of
this Court. Additionally, they are assessed the costs of this proceeding.
The Clerk of this Court is directed to provide notice of this order in
accordance with Admis.Disc.R. 23(3)(d) and to the hearing officer, and to
provide the clerk of the United States Court of Appeals for the Seventh
Circuit, the clerk of each of the United States District Courts in this
state, and the clerks of the United States Bankruptcy Courts in this state
with the last known address of respondent as reflected in the records of
the Clerk.
-----------------------
[1] We note that on December 6, 1995, the hearing officer ordered that,
“Phillip B. Allen is ordered separated from John P. Coale for the purposes
of cause number and trial. Allen should be given a new and separate cause
and cause number. Disciplinary Commission is directed to ensure this is
accomplished.” The docket in this case does not reflect that the ordered
separation was ever accomplished. On January 2, 2001, this Court’s clerk
sent by mail notice of pre-trial hearing to each respondent to their
address as reflected on this Court’s clerk’s docket. On January 15, 2001,
the hearing officer ordered final hearing to be set for March 23, 2001,
with notice sent to both respondents to their addresses as reflected on
this Court’s clerk’s docket, again by mail. That order noted that
respondent Allen did not appear at pre-trial conference. The hearing
officer’s findings of fact, filed on June 22, 2001, also reflected that
respondent Allen did not appear at the final hearing on March 23, 2001.
The docket also indicates that neither notice sent to Allen was returned as
undeliverable.
[2] Pursuant to that rule, an attorney not admitted to practice in this
state may nonetheless seek a limited admission upon petition for a
particular proceeding.
[3] In his petition for review, Respondent Coale states that he did argue
this point before the hearing officer in his Brief in Opposition to the
Charges of the Disciplinary Commission, signed by the respondent’s counsel
on April 6, 2001. However, the copy provided to this Court as an exhibit
to the respondent’s pleadings upon petition for review of the hearing
officer’s findings bears no file stamp, and the chronological case summary
in this case does not indicate that that document was ever filed before the
hearing officer.
[4] Admission and Discipline Rule 23(14)(b) provides that an answer “shall
admit or controvert the averments set forth in the complaint. . .
[a]verments in the complaint are admitted when not denied in the answer.”
[5] We also note that one of the recipients in this case, Tom Welch, was
also a recipient of solicitations from other out-of-state attorneys after
the disaster. Lawyers Gerald C. Sterns and George W. Murgatroyd, III,
admitted to misconduct by sending the solicitations to Welch and others.
Matter of Murgatroyd and Sterns, 741 N.E.2d 719 (Ind. 2001).
[6] Canon 3(E) provides, in relevant part:
(1) A judge shall disqualify himself or herself in a proceeding in
which the judge's impartiality might reasonably be questioned, including
but not limited to instances where:
(a) the judge has a personal bias or prejudice concerning a party or
a party's lawyer, or personal knowledge of disputed evidentiary facts
concerning the proceeding [. . .]
[7] Professional Conduct Rule 7.3(c) provides:
Every written or recorded communication from a lawyer soliciting
professional employment from a prospective client potentially in need of
legal services in a particular matter, and with whom the lawyer has no
family or prior professional relationship, shall include the words
"Advertising Material" conspicuously placed both on the face of any outside
envelope and at the beginning of any written communication, and both at the
beginning and ending of any recorded communication. A copy of each such
communication shall be filed with the Indiana Supreme Court Disciplinary
Commission at or prior to its dissemination to the prospective client. In
the event a written or recorded communication is distributed to multiple
prospective clients, a single copy of the mailing less information specific
to the intended recipients, such as name, address and date of mailing, may
be filed with the Commission. Each time any such communication is changed
or altered, a copy of the new or modified communication shall be filed with
the Disciplinary Commission at or prior to the time of its mailing or
distribution. The lawyer shall retain a list containing the names and
addresses of all persons or entities to whom each communication has been
mailed or distributed for a period of not less than one (1) year following
the last date of mailing or distribution. Communications filed pursuant to
this subdivision shall be open to public inspection.
[8] Professional Conduct Rule 7.1(d)(2), (3) and (5) provide:
A lawyer shall not, on behalf of himself, his partner or associate, or
any other lawyer affiliated with him or his firm, use or participate in the
use of any form of public communication which:
. . .
(2) contains statistical data or other information based on past
performance or prediction of future success;
(3) contains a testimonial about or endorsement of a lawyer;
. . .
(5) appeals primarily to a lay person's fear, greed, desire for
revenge, or similar emotion[.]
[9] See footnote 4, supra.
[10] Prof.Cond.R. 7.1(b) provides:
(b) A lawyer shall not, on behalf of himself, his partner or
associate or any other lawyer affiliated with him or his firm, use, or
participate in the use of, any form of public communication containing a
false, fraudulent, misleading, deceptive, self-laudatory or unfair
statement or claim.
[11] Prof.Cond.R. 8.4 provides, in relevant part:
It is professional misconduct for a lawyer to (a) violate or attempt
to violate the rules of professional conduct; . . . (d) engage in conduct
that is prejudicial to the administration of justice.