This post examines an opinion from the Supreme Court of Minnesota, sitting in its capacity as the institution that is responsible for
enforcing the Minnesota Rules of Professional Conduct, which you can access
here. In re Charges of Unprofessional Conduct in Panel File No. 39302, 2016
WL 4536594 (2016) (per curiam) (hereinafter, “In re
Charges, supra”). The Supreme Court does not, either in the title of the
opinion or in its text, identify the lawyer at issue by name, which is not
uncommon. In re Charges, supra.
The Court begins the opinion by explaining that the
Director of the Office of Lawyers
Professional Responsibility (the Director) issued a private admonition to
appellant for engaging in the unauthorized practice of law in Minnesota.
Appellant demanded that the Director present the charge to a Panel of the
Lawyers Professional Responsibility Board (the Panel). Following an evidentiary hearing, the Panel affirmed the Director's admonition, finding that appellant
had engaged in the unauthorized practice of law in Minnesota, in violation
of Minn. R. Prof. Conduct 5.5(a), and that the misconduct was isolated and
non-serious. Appellant filed a notice of appeal, contesting the Panel's
determination that his conduct violated Minn. R. Prof. Conduct 5.5. See Rule 9(m), Rules on Lawyers Professional Responsibility. (RLPR).
We hold that engaging in e-mail
communications with people in Minnesota may constitute the unauthorized
practice of law in Minnesota, in violation of Minn. R. Prof. Conduct
5.5(a), even if the lawyer is not physically present in Minnesota. The Panel's
finding that appellant engaged in the unauthorized practice of law in
Minnesota, in violation of Minn. R. Prof. Conduct 5.5(a), was not clearly
erroneous. Appellant represented a Minnesota couple with respect to a Minnesota
judgment and attempted to negotiate, via e-mail, the satisfaction of that
judgment with a Minnesota lawyer, and was not authorized to practice law in
Minnesota temporarily. . . .
In re Charges, supra. You can access the Minnesota Rules of
Professional Conduct here.
The opinion goes on to explain that
[a]ppellant is an attorney licensed to
practice law in the state of Colorado, where he maintains an office and has
been practicing environmental law since 1986. He has also practiced personal
injury law for approximately 7 years. Part of his litigation practice includes
debt collection. Appellant is admitted to practice law in New York, Florida,
and Alaska, but is currently on inactive status in those states. Appellant is
also admitted to practice in federal court in the District of Colorado, the
District of Alaska, the Southern and Western Districts of New York, and the
United States Court of Appeals for the Ninth and Tenth Circuits. Appellant is
not licensed to practice law in Minnesota.
In re Charges, supra.
The opinion then goes on to outline the facts involved in
this proceeding:
Appellant's mother- and father-in-law
live in Minnesota. They contacted appellant in May 2014 to obtain assistance regarding
a judgment entered against them in conciliation court in Minnesota for
$2,368.13 in favor of their condominium association, Voyager Condominium
Homeowners' Association, Inc. (VCHA). The couple told appellant that VCHA's
attorney, D.R., a Minnesota-based lawyer and the complainant in this case, was
harassing them with telephone calls attempting to collect on the judgment. The
couple asked appellant for his assistance in negotiating with D.R. regarding
payment of the outstanding judgment.
Appellant sent an e-mail to D.R. in
late May 2014, informing D.R. that he was representing his in-laws and
instructing D.R. to direct all future communications to him instead. Appellant
and D.R. exchanged approximately two dozen e-mails between May 2014 and September
2014. In his first responsive e-mail to appellant, D.R. asked whether appellant
was licensed to practice law in Minnesota. Appellant replied that he was not
licensed in Minnesota and that if he needed to file suit in Minnesota he would
hire local counsel. The subsequent e-mails consisted of discussions regarding
the in-laws' assets and ability to pay and whether the VCHA judgment would have
priority in a foreclosure sale. Appellant attached financial disclosure forms
to one of his e-mails and made a settlement offer.
In the penultimate e-mail exchange
between the two attorneys, D.R. asserted that appellant was engaging in the
unauthorized practice of law because he was not licensed in Minnesota. The
final e-mail prior to D.R. filing an ethics complaint was a settlement proposal
from appellant to D.R. on that same day. The Director received D.R.'s ethics
complaint in October 2014. Approximately 2 months after filing the complaint,
D.R. sent additional e-mails to appellant to determine whether the settlement
offer was still available and whether appellant still represented his
in-laws. Appellant did not respond to the subsequent e-mails and had no further
involvement in the case.
In re Charges, supra. The opinion then goes on to explain that
[n]othing in the record shows that
appellant researched whether his activities constituted the unauthorized
practice of law under the Minnesota Rules of Professional Conduct. When asked
by the Panel at the evidentiary hearing whether he researched the rules in
Minnesota, appellant said that he did not recall. Appellant admitted that he
had not researched Minnesota law on foreclosure and how it would apply to his
in-laws' case. Appellant also admitted that when he considered the relevant law
and the rules of professional conduct, he was more familiar with the laws and
rules in Colorado.
The Panel affirmed the Director's
admonition, finding that clear and convincing evidence demonstrated a violation
of Minn. R. Prof. Conduct 5.5(a). See Rule 9(j)(1)(iii), RLPR.
The Panel found that appellant `is not licensed in Minnesota. . . .He is
licensed in Colorado.... He was—although maybe not paid, he certainly has held
out the fact that he represented clients, which regardless of whether they're
related or not, he did represent them, admitted to representing them in a
purely Minnesota case.’
Pursuant to Rule 9(m), RLPR,
appellant appealed the admonition to this court. Specifically, appellant
challenges the Panel's determinations that he violated Minn. R. Prof.
Conduct 5.5(a) and that his conduct did not fall within one of the
exceptions in Minn. R. Prof. Conduct 5.5(c). We address each issue in
turn.
In re Charges, supra.
The Supreme Court went on to explain that
[w]e turn first to appellant's claim
regarding Rule 5.5(a). It states, in relevant part, that `[a] lawyer shall
not practice law in a jurisdiction in violation of the regulation of the legal
profession in that jurisdiction. . . .’ Minn. R. Prof. Conduct 5.5(a).
Appellant contends that he did not
violate Rule 5.5(a) because he did not practice law in Minnesota. According to appellant, a
lawyer practices in a jurisdiction in one of three ways: (1)
by being physically present in the jurisdiction; (2) by establishing an office
or other systematic and continuous presence in the jurisdiction; or (3) by
entering an appearance in a matter through the filing of documents with a
tribunal. Appellant argues that e-mail communication directed to a jurisdiction
in which the lawyer is not admitted to practice does not fall within the
definition of practicing law in a jurisdiction, and thus the
Panel erred in its determination that he violated Rule 5.5(a).
In re Charges, supra
(emphases in the original).
The Supreme Court also explained that
[w]e review findings made in lawyer
discipline cases under a clearly erroneous standard. In re Panel Case
No. 23236, 728 N.W.2d 254, 257–58 (Minnesota Supreme Court 2007). We `will
uphold the panel's factual findings if they have evidentiary support in the
record and are not clearly erroneous.’ In re Mose, 754 N.W.2d 357,
360 (Minnesota Supreme Court 2008) (citing In re Singer, 735
N.W.2d 698, 703 (Minn.2007)).
Appellant concedes for the purpose of
this appeal that he engaged in the practice of law, albeit in Colorado. Such a
concession is consistent with our prior cases holding that negotiating the
resolution of a claim on behalf of a client constitutes the practice of
law. See In re Ray, 610 N.W.2d 342, 343, 346 (Minnesota
Supreme Court 2000) (upholding the referee's finding that the attorney
engaged in the unauthorized practice of law by negotiating with the county
attorney on behalf of a client while the attorney was subject to a disciplinary
suspension); In re Ray, 452 N.W.2d 689, 693 (Minnesota Supreme
Court 1990) (holding that `the record support[ed] the referee's conclusion’
that the attorney engaged in the unauthorized practice of law by attempting to
negotiate settlements for two clients).
Appellant maintains, however, that an
attorney does not practice law in another jurisdiction merely by engaging
in e-mail communications with
individuals in that jurisdiction. Whether an attorney engages in the practice
of law in Minnesota by sending e-mails from jurisdiction is a
matter of first impression.
In re Charges, supra
(emphasis in the original).
Next, the Supreme Court explained that
Rule 5.5(a) of the Minnesota Rules of
Professional Conduct does not explicitly define what it means to practice
law in a jurisdiction. Certainly, physical presence is one way to
practice law in a jurisdiction. But, as we set forth below, it
is not the only way.
In re Charges, supra
(emphasis in the original).
The court went on to explain that
[o]ther courts have addressed the issue
of whether an attorney practices law in a jurisdiction even though the attorney
was not physically present in that jurisdiction. In Birbrower,
Montalbano, Condon & Frank, P.C. v. Superior Court, 17 Cal.4th
119, 70 Cal.Rptr.2d 304, 949 P.2d 1, 5–6 (1998), the California Supreme Court
analyzed what constituted the practice of law in a jurisdiction by looking at
the nature of the legal representation in the jurisdiction, instead of focusing
solely on physical presence. In determining what it means to practice law in
California, the court considered whether the lawyer had `sufficient contact
with the California client to render the nature of the legal services a clear
legal representation’ and whether the lawyers' contact with California was
merely `fortuitous or attenuated.’ Id., 70 Cal.Rptr.2d 304, 949 P.2d at
5. The court determined that a lawyer `may practice law in the state . . .
although not physically present here by advising a California client on
California law in connection with a California legal dispute by telephone, fax,
computer, or other modern technological means.’ Id., 70 Cal.Rptr.2d
304, 949 P.2d at 5–6; see also In re Babies, 315 B.R.
785, 791–93 (Bankr.N.D.Ga.2004) (concluding that attorneys who were
physically present in Illinois practiced law in Georgia by representing Georgia
clients with respect to a bankruptcy, preparing documents related to that
bankruptcy, and communicating with these clients via the telephone and mail).
The reasoning in Birbrower is
persuasive. Based on that reasoning, we conclude that the Panel did not clearly
err by finding that appellant practiced law in Minnesota, in
violation of Minn. R. Prof. Conduct 5.5(a). Appellant contacted D.R., a
Minnesota lawyer, and stated that he represented Minnesota clients in a
Minnesota legal dispute. This legal dispute was not interjurisdictional;
instead, it involved only Minnesota residents and a debt arising from a
judgment entered by a Minnesota court. Appellant instructed D.R. to refer all
future correspondence to him, and he continued to engage in correspondence and
negotiations with D.R. over the course of several months. Appellant requested
and received financial documents from his Minnesota clients and advised them on
their legal options. By multiple e-mails sent over several months, appellant
advised Minnesota clients on Minnesota law in connection with a Minnesota legal
dispute and attempted to negotiate a resolution of that dispute with a
Minnesota attorney. Appellant had a clear, ongoing attorney-client relationship
with his Minnesota clients, and his contacts with Minnesota were not fortuitous
or attenuated. Thus, there is ample support for the Panel's finding that
appellant practiced law in Minnesota.
In re Charges, supra.
The court then took up the
appellant's claim that even if the
Panel did not err in determining that he was practicing law in Minnesota in
violation of Minn. R. Prof. Conduct 5.5(a), his conduct was permitted
under one of the exceptions in Minn. R. Prof. Conduct 5.5(c). Appellant argues
that Rule 5.5(c)(2) authorized his conduct because he reasonably believed
that he would be able to associate with local counsel and be admitted pro hac vice if necessary. Appellant further claims that Rule
5.5(c)(4) authorized his conduct because his in-laws reached out to him
for assistance on a matter within his expertise; thus the matter `arose out of
[Appellant's] law practice.’
In re Charges, supra.
It explained that
Rule 5.5(c) permits an attorney to
practice temporarily in a jurisdiction in which the attorney is not admitted.
It states:
A lawyer admitted in another United
States jurisdiction, and not disbarred or suspended from practice in any
jurisdiction, may provide legal services on a temporary basis in this
jurisdiction which: . . .
(2) are in or reasonably related to a
pending or potential proceeding before a tribunal in this or another
jurisdiction, if the lawyer, or a person the lawyer is assisting, is authorized
by law or order to appear in the proceeding or reasonably expects to be so authorized;
. . . . or
(4) are not within paragraphs (c)(2) or (c)(3)
and arise out of or are reasonably related to the lawyer's practice in a
jurisdiction in which the lawyer is admitted to practice.
Minn. R.
Prof. Conduct 5.5(c).
In re Charges, supra.
The Supreme Court then began its analysis of this argument,
explaining that under
Minnesota Rules of Professional Conduct
5.5(c)(2), a lawyer admitted in another jurisdiction may provide legal services
in Minnesota on a temporary basis if the lawyer's services are reasonably
related to a pending or potential proceeding before a tribunal and the lawyer
reasonably expects to be authorized by law to appear in the proceeding. Comment 10 explains that a lawyer rendering services in Minnesota on a temporary basis
is permitted to engage in conduct in anticipation of a proceeding or hearing in
which the lawyer reasonably expects to be admitted pro hac vice. Minn. R. Prof. Conduct 5.5(c)(2) cmt. 10.
Appellant suggests that there was a
potential proceeding that could be brought on behalf of his in-laws. Because of
this belief, appellant contends Rule 5.5(c)(2) protects him. The
Director persuasively argues that appellant knew further litigation was
unlikely because a court had already decided the underlying case involving his
in-laws, and appellant was simply negotiating a potential debt resolution. In
addition, Rule 5.5(c)(2), by its plain language, requires more than an
attorney's speculation that the attorney can find local counsel and be admitted
to practice pro hac vice. Appellant's
e-mail correspondence does not indicate that he took steps to secure local
counsel or investigate the possibility of pro hac vice admission. Thus, we
conclude there is no support for appellant's claim that his conduct was
authorized by Rule 5.5(c)(2).
In re Charges, supra.
The court then took up the lawyer’s final argument, i.e., that
there was a potential proceeding that
could be brought on behalf of his in-laws. Because of this belief, appellant
contends Rule 5.5(c)(2) protects him. The Director persuasively
argues that appellant knew further litigation was unlikely because a court had
already decided the underlying case involving his in-laws, and appellant was
simply negotiating a potential debt resolution. In addition, Rule
5.5(c)(2), by its plain language, requires more than an attorney's speculation
that the attorney can find local counsel and be admitted to practice pro hac
vice. Appellant's e-mail correspondence does not indicate that he took steps to
secure local counsel or investigate the possibility of pro hac vice admission. Thus, we conclude there is no support for
appellant's claim that his conduct was authorized by Rule 5.5(c)(2).
Under Minnesota Rules of
Professional Conduct 5.5(c)(4), a lawyer admitted in another jurisdiction may
provide legal services in Minnesota on a temporary basis if the lawyer's
services are not covered by paragraphs (c)(2) and (c)(3) and `arise out of or
are reasonably related to the lawyer's practice in a jurisdiction in which the lawyer
is admitted to practice.’ Appellant contends that his services arose out of or
were reasonably related to his practice in Colorado because the clients are his
relatives who `reached out to him for assistance’ and appellant's environmental
and personal-injury practice involves debt collection.
Comment 14 of Minnesota Rules of
Professional Conduct 5.5 provides guidance on this
issue. Specifically, comment 14 instructs that several factors may
demonstrate that an attorney's temporary legal services in Minnesota reasonably
relate to the lawyer's practice in a jurisdiction in which the lawyer is
admitted to practice (“lawyer's home jurisdiction”), including: whether the
client is a resident of or has substantial contacts with the lawyer's home
jurisdiction; whether the client has previously been represented by the lawyer;
whether a significant aspect of the matter involves the law of the lawyer's
home jurisdiction; whether the client's activities or the legal issues involve
multiple jurisdictions; or whether the services `draw on the lawyer's
recognized expertise developed through the regular practice of law on behalf of
clients in matters involving a particular body of federal, nationally-uniform,
foreign, or international law.’ Minn. R. Prof. Conduct 5.5 cmt. 14. .
. .
In re Charges, supra.
The Supreme Court found, though, that the
legal services appellant provided to
his in-laws were unrelated to his environmental and personal-injury practice in
Colorado. The record establishes that appellant was involved in litigation in
Colorado state court, including eight trials in the past 7 years in which
collection issues arose, and that appellant negotiated the resolution of a
debt with an out-of-state creditor on behalf of several Colorado residents.
Although Rule 5.5(c) may permit appellant to negotiate with a
Colorado client's out-of-state creditor because this representation is
reasonably related to appellant's Colorado practice, the facts of this case are
substantially different. Appellant's in-laws are not Colorado residents, and
appellant had no prior attorney-client relationship with them.
Moreover, appellant's representation of
his in-laws did not `arise out of’ or `reasonably relate’ to his practice in
Colorado simply because his in-laws contacted him in Colorado or appellant has
done collections work in Colorado. As the Director notes, appellant's in-laws
were not long-standing clients; nor was there any connection between the
in-laws' case and the state or laws of Colorado. And while appellant's Colorado
practice may involve judgment collections work, nothing in the record
establishes that this work was based on a body of federal or nationally uniform
law. To the contrary,
appellant's clients were Minnesota residents with a debt that arose in
Minnesota that they owed to a Minnesota resident and that was governed by
Minnesota law. Accordingly, Rule 5.5(c)(4) does not apply to
appellant's conduct.
In re Charges, supra.
Next, the Court explained that it needed to decide on
the appropriate discipline for
appellant's misconduct. We give great weight to the recommendations of the
Panel, but we have `the final responsibility for determining appropriate
discipline for violations of the rules of professional conduct’. Panel
Case No. 23236, 728 N.W.2d at 258. We do not impose sanctions in
attorney-discipline cases as punishment, but rather we impose sanctions `to
protect the public, to protect the judicial system, and to deter future
misconduct by the disciplined attorney [and] other attorneys.’ In re
Rebeau, 787 N.W.2d 168, 173 (Minn.2010). We impose sanctions according
to the unique facts of each case, and `when considering appropriate sanctions
for misconduct, we weigh the following factors: (1) the nature of the
misconduct, (2) the cumulative weight of the disciplinary violations, (3) the
harm to the public, and (4) the harm to the legal profession.’ Panel Case
No. 23236, 728 N.W.2d at 258 (citation omitted) (internal quotation
marks omitted).
In re Charges, supra.
The Court therefore found that the
nature of the misconduct in this case
is non-serious. Appellant wrongly believed that he could negotiate a settlement
in Minnesota without being licensed to practice law in the state. The
cumulative weight of the misconduct is also minimal. Appellant engaged in a
series of e-mail communications with one attorney in a single matter involving
appellant's family members. In addition, the only harm appellant's clients
suffered was a delay in the resolution of their debt because of appellant's
actions. Accordingly, a private admonition is the appropriate discipline for
appellant.
In re Charges, supra.
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