|FOR RESPONDENT |FOR THE INDIANA SUPREME COURT |
|GEORGE W. MURGATROYD, III |DISCIPINARY COMMISSION |
| | |
|Samuel J. Goodman |Donald R. Lundberg, Executive |
|9013 Indianapolis Blvd. |Secretary |
|Highland, IN 46322 |Charles M. Kidd, Staff Attorney |
| |115 West Washington Street, Suite 1165|
|FOR RESPONDENT |Indianapolis, IN 46204 |
|GERALD C. STERNS | |
| | |
|James H. Voyles | |
|Ste. 700, One Virginia Ave. | |
|Indianapolis, IN 46204 | |
IN THE
SUPREME COURT OF INDIANA
IN THE MATTER OF )
) CASE NO. 98S00-9303-DI-307
GEORGE W. MURGATROYD, III )
IN THE MATTER OF )
) CASE NO. 98S00-9303-DI-310
GERALD C. STERNS )
DISCIPLINARY ACTION
February 5, 2001
Per Curiam
These two disciplinary cases arise from the same underlying incident
involving out-of-state lawyers’ written solicitation in this state of the
families and the victims of a 1992 airplane crash. Before us now for our
consideration are proposed agreed judgments, submitted by the Disciplinary
Commission and the respondents, offering agreed resolution of the verified
complaints for disciplinary action pending in these matters. As it is the
exclusive province of this Court to regulate professional legal activity in
this state,[1] we now must decide whether to accept the proposed judgments
as acceptable means to dispose of the allegations of misconduct pending
against the respondents.
Respondent Murgatroyd is an attorney in good standing in the state of
California, having been admitted there in 1983. Respondent Sterns is also
an attorney in good standing in the state of California, having been
admitted there in 1960. Each concentrates his practice in the area of
“mass tort” litigation. 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 Ind.Admission and Discipline Rule 3(2).[2]
Accordingly, both respondents asserted at some length that this Court
does not possess either subject matter jurisdiction or personal
jurisdiction over them. They also sought to dismiss the Commission’s
request for injunctive relief aimed at preventing practices that might be
contrary to Indiana law. These issues were resolved against the
respondents in both state and federal court. In the Matter of George W.
Murgatroyd, III, No. 98S00-9303-DI-307 (Ind., Oct. 29, 1993) (motion to
dismiss on grounds of jurisdiction and motion to dismiss request for
injunction both denied); In the Matter of Gerald C. Sterns, No. 98S00-9303-
DI-310 (Ind., Oct. 29, 1993) (same); Sterns v. Lundberg, 922 F.Supp. 164
(S.D. Ind. 1996) (complaint alleging lack of personal and subject matter
jurisdiction dismissed).
The facts are not in dispute. On February 6, 1992, a military
aircraft crashed in Evansville, Indiana. A number of fatalities occurred
both among the aircrew and others on the ground as a result of the crash.
Employees or someone under the control of both Respondent Sterns and
Respondent Murgatroyd, respectively, caused to be delivered by United
States mail written solicitations to prospective clients in connection with
the crash. Those submissions were not transmitted to the Commission and
did not contain the words “advertising material” thereon. The respondents
did not regularly solicit prospective clients in this state before the
plane crash and do not regularly solicit clients in this state. They did
not investigate, or cause to be investigated, the requirements of Indiana
law with respect to targeted mail solicitations at or before the time the
written solicitations were transmitted to Indiana, although that failure
was not for the intentional purpose of committing misconduct under our
Rules of Professional Conduct for Attorneys at Law. Their solicitations
never resulted in either being retained by any client. In cases where the
respondents have represented clients in a jurisdiction where they are not
admitted, they have associated themselves with local counsel with specific
goals of complying with all procedural, substantive and ethical laws of the
forum jurisdiction. The respondents’ selection of and affiliation with
qualified local counsel, however, is a step which commonly occurs after
they have made the decision to undertake an attorney-client relationship
with a prospective plaintiff or group of plaintiffs. The respondents do
not customarily associate with local counsel prior to being retained by
specific clients.
The verified complaints for disciplinary action in both cases each
contain two counts. Count I of each complaint charges that the respondents
violated Indiana’s Rules of Professional Conduct pertaining to the form and
procedure with which lawyers’ written solicitations of clients in this
state must comply. In the alternative, count II of each complaint alleges
that by the act of causing the solicitations to be dispersed to prospective
clients in this state, the respondents engaged in the unauthorized practice
of law in this state.
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.[3] 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.[4] Those acts
constituted professional legal activity in this state subject to our
regulatory authority. See Fletcher, 655 N.E.2d 58, 59.
Available procedural routes for use in addressing charges of
unauthorized practice of law in this state include referral to the
Commission and an original action in the Supreme Court pursuant to
Admis.Disc.R. 24 governing the unauthorized practice of law. See Matter of
Mittower, 693 N.E.2d 555 (Ind. 1998) (unauthorized practice of law after
order accepting resignation from state bar constituted indirect contempt of
this Court); Cincinnati Ins. Co. v. Wills, 717 N.E.2d 151, 154 (Ind. 1999).
A law license issued by another state is not subject to sanction by this
Court. Fletcher, 655 N.E.2d at 61. However, this Court may impose
penalties appropriate to punish or prevent misconduct that occurs in
Indiana. Id.
Count I of each 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). 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).[5] It charged that they contained statistical
data or other information based on past performance or a prediction of
future success, which statements are prohibited by Prof.Cond.R.
7.1(d)(2).[6] 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).[7] It further charged that Respondent Murgatroyd’s
solicitation materials contained endorsements of and testimonials about him
and that it used language appealing primarily to a lay person’s fear,
greed, desire for revenge, or similar emotion, in violation of Prof.Cond.R.
7.1(d).[8]
The agreed judgments provide for the dismissal of each count I, but
the remaining operative language of each agreed judgment provides that the
respondents, pursuant to Admission and Discipline Rule 24, shall be
enjoined to comply with various terms and conditions attaching to any
future solicitations and/or representations they may make or undertake this
state. Those terms and conditions are as follow:
1. Any future solicitation of prospective clients by means of targeted
communications which are transmitted by any medium into the state of
Indiana shall comply with the then-current requirements of Indiana’s Rules
of Professional Conduct or any successor rules as promulgated by his Court.
2. Before the initiation of any attorney-client relationship with any
Indiana resident, or before undertaking a representation involving a cause
of action with a venue within the state of Indiana, the respondents shall
familiarize themselves with the then-current version of Indiana’s Rules of
Professional Conduct or any successor rules as promulgated by this Court
and comply with said rules.
3. Within a reasonable time after undertaking a representation involving a
cause of action in any court in this state, the respondents shall associate
themselves with a member in good standing of the Indiana bar and shall
apply for pro hac vice admission in accordance with all the provisions of
Admis.Disc.R. 3 or its successor rule.
4. The respondents shall put reasonable measures in place to ensure that
the conduct of their law partners, associate lawyers, non-lawyer support
staff, experts or independent contractors comports with the terms of their
agreements and Indiana’s Rules of Professional Conduct. The respondents
shall be vicariously responsible for the conduct of those under their
supervision and direction who violate such rules.
We find that the agreed injunctions in these cases represent adequate
remedies for the respondents’ sending to prospective Indiana clients
targeted written solicitations. The terms of the injunction are sufficient
to ensure that, should the respondents ever again send written
solicitations to prospective clients in this state, their solicitations
will comply with Indiana’s Rules of Professional Conduct or any rules of
conduct applicable at that time. The terms also ensure that, should
future solicitations ever evolve into an attorney-client relationship
between the respondents and any Indiana clients, the respondents will
become properly admitted to the practice of law in this state for the
resulting representation. We note, however, that, had these cases been
litigated, the judgments imposed by this Court would not necessarily have
been the same as the agreed judgments we have accepted.
It is, therefore, ordered that the proposed agreed judgments in these
matters are hereby accepted.
It is further ordered that Count I of the verified complaints for
disciplinary action filed in Matter of Sterns and Matter of Murgatroyd are
hereby dismissed, without prejudice.
The Clerk of this Court is directed to provide notice of this order in
accordance with Admis.Disc.R. 23(3)(d) 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.
Costs of this proceeding are assessed against the respondents.
-----------------------
[1] Ind.Const., Art. VII, Sec. 4; Matter of Fletcher, 655 N.E.2d 58 (Ind.
1995).
[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] Indiana law governing the unauthorized practice of law includes the
following provisions:
Admis.Disc.R. 24. Rules Governing the Unauthorized Practice of Law
Original actions, under Chapter 143 of the 1951 Acts, to restrain or
enjoin the unauthorized practice of law in this state may be brought
in this court by the attorney general, the Indiana State Bar
Association or any duly authorized committee thereof, without leave of
court, and by any duly organized local bar association by leave of
court. The action against any person, firm, association or
corporation, shall be brought by verified petition, in the name of the
state of Indiana, on the relation of the authorized person or
association or committee, and shall charge specifically the acts
constituting the unauthorized practice.
Within time allowed, a respondent may file a verified return showing
any reason in law or fact why an injunction should not issue. No
other pleading in behalf of a respondent will be entertained. All
allegations of fact in the petition and return shall be specific and
not by way of ultimate fact or conclusion. The return shall
specifically deny or admit each allegation of fact in the petition,
and it may allege new facts in mitigation or avoidance of the causes
alleged in the petition.
The parties shall file an original and five [5] copies of all
pleadings, including exhibits, plus an additional copy for each
adverse party. If any exhibit shall be a matter of public record one
[1] certified copy thereof shall be filed with the original petition
or return. No pleading or exhibit thereto will be considered which
has words or figures on both sides of the same sheet of paper.
No restraining order will issue without notice except upon the filing
of an undertaking with conditions and surety to the approval of the
court. Notice of the filing of the petition will be given and served
upon any respondent as may be directed by the court, such notice to be
accompanied by a copy of the petition. The clerk will mail a copy of
any return to the relator.
The verified petition and return shall constitute the evidence upon
which the issues are decided, unless the court shall deem it necessary
to, and shall appoint, a commissioner, in which event such
commissioner, who shall have full authority to subpoena witnesses and
records, shall hear the evidence and report his findings of fact to
the court.
A copy of any pertinent agreement, made by any recognized bar
association concerning the unauthorized practice of law, may be
attached to and made a part of any pleading and unless denied under
oath shall be deemed to be a true copy without further proof of the
execution thereof.
The costs and expenses incurred by such hearing shall be borne by the
losing party. Briefs need not conform to requirements of Appellate
Rules 8.1-8.4. Arguments will not be heard as of right.
33-2-3-1 Rules and regulations of court
The Supreme Court of this state shall have exclusive jurisdiction to
admit attorneys to practice law in all courts of the state and
exclusive jurisdiction to issue restraining orders and injunctions in
all cases involving the unauthorized practice of the law under such
rules and regulations as it may prescribe.
[4] In this regard, we note that, pursuant to IC 33-1-5-1, it is a class B
misdemeanor for a person to “hold himself out as a practicing lawyer, to
conduct the trial of a case in any court of this state, or to engage in the
business of a practicing lawyer, without first having been admitted as an
attorney-at-law by the supreme court of this state.”
[5] 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.
[6] Professional Conduct Rule 7.1(d)(2) provides:
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[.]
[7] See footnote 4, supra.
[8] Professional Conduct Rule 7.3(d)(5) provides:
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:
(5) appeals primarily to a lay person's fear, greed, desire for
revenge, or similar emotion[.]