Articles Posted in Legal Ethics

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The Fourth Circuit affirmed the district court's order sanctioning three attorneys and their law firms under both its inherent authority and 28 U.S.C. 1927. The court held that the district court did not abuse its discretion in awarding compensatory sanctions totaling $150,000. In this case, the sanctioned attorneys' objections to the authenticity of certain documents abused the judicial process both because they lacked a good faith basis and because the attorneys made repeated misrepresentations to the court in order to sustain these objections. Furthermore, under section 1927, the district court found that the attorneys engaged in bad-faith conduct and that this conduct multiplied the proceedings unreasonably and vexatiously. The court held that the district court correctly articulated the applicable legal standards, made appropriate factual findings, and supported its conclusions with ample evidence from the record. View "Six v. Generations Federal Credit Union" on Justia Law

Posted in: Legal Ethics

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Verisign filed suit against XYZ, alleging false advertising based on a false "gold rush" scheme involving domain names. The district court ultimately granted summary judgment for XYZ, but denied it attorney fees under the Lanham Act, 15 U.S.C. 1117(a). The Fourth Circuit held that a prevailing party need only prove an exceptional case by a preponderance of the evidence, rather than by clear and convincing evidence. The court further clarified that a prevailing party need not establish that the losing party acted in bad faith in order to prove an exceptional case. Therefore, the court remanded for the district court to consider the motion under the appropriate legal and evidentiary standards. View "Verisign, Inc. v. XYZ.Com LLC" on Justia Law

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Verisign filed suit against XYZ, alleging false advertising based on a false "gold rush" scheme involving domain names. The district court ultimately granted summary judgment for XYZ, but denied it attorney fees under the Lanham Act, 15 U.S.C. 1117(a). The Fourth Circuit held that a prevailing party need only prove an exceptional case by a preponderance of the evidence, rather than by clear and convincing evidence. The court further clarified that a prevailing party need not establish that the losing party acted in bad faith in order to prove an exceptional case. Therefore, the court remanded for the district court to consider the motion under the appropriate legal and evidentiary standards. View "Verisign, Inc. v. XYZ.Com LLC" on Justia Law

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Intervening defendants could not be required to pay a portion of prevailing plaintiffs' attorneys fees and costs, awarded under 42 U.S.C. 1988(b) and 52 U.S.C. 10310(e), when intervening defendants were not charged with any wrongdoing and could not be held liable for the relief that plaintiffs sought. In Independent Federation of Flight Attendants v. Zipes, 491 U.S. 754 (1989), the Supreme Court precluded the assessment of attorneys fees and costs against intervenors who were "blameless," meaning that they were not charged as wrongdoers and legal relief could not have been obtained from them. In this racial gerrymandering case, the Fourth Circuit held that Zipes was controlling and that the Commonwealth could not be held liable for attorneys fees and costs incurred by plaintiffs in litigating against the entry of Intervening Congressmen or against Intervening Congressmen's positions. Under the traditional American rule, plaintiffs must bear those intervention-related fees. Accordingly, the court vacated the district court's order awarding attorneys fees and costs, remanding for reconsideration of plaintiffs' petitions for fees. View "Brat v. Personhuballah" on Justia Law

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After the Court of Appeals of Maryland suspended Michael Tankersley’s law license when he refused to provide his social security number to the Client Protection Fund of the Bar of Maryland, Tankersley filed suit against the trustees of the Fund, and the judges and the clerk of the Court of Appeals. Tankersley filed suit against these defendants in their official capacities, seeking injunctive relief based on his claim that his suspension violated the federal Privacy Act, 5 U.S.C. 552a. The district court granted defendants’ motion to dismiss. Both the Tax Reform Act, 42 U.S.C. 405(c)(2)(C)(i), and the Welfare Reform Act, 42 U.S.C. 666(a)(13)(A), allow states to collect individuals’ social security numbers in specific situations. The court held that the district court erred in relying on section 666 of the Welfare Reform Act to dismiss Tankersley’s complaint. In this case, the court agreed with Tankersley that “applicant” cannot properly be read to include a Maryland attorney who must pay an annual fee to maintain his license. However, the court concluded that section 405 of the Tax Reform Act applies to Tankersley, and the state of Maryland may lawfully compel him to provide his social security number to the Fund or consequently have his law license suspended. Accordingly, the court affirmed the district court's judgment. View "Tankersley v. Almand" on Justia Law

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NAAMJP filed suit challenging the conditions placed on the privilege of admission to the Bar of the United States District Court for the District of Maryland in Local Rule 701. Among other things, the Rule contains requirements based on the state of licensure and, in some instances, the location of the attorney’s law office. The district court granted defendants' motion to dismiss and denied NAAMJP's motion for summary judgment. The court concluded that Rule 701 does not violate the First Amendment where it qualifies as a general applicable licensing provision, prescribing which attorneys may practice in the District Court based on their state of licensure in relation to the location of their principal law office; Rule 701 does not violate the Equal Protection Clause where it does not infringe a fundamental right or disadvantage a suspect class; Rule 701 does not violate the Rules Enabling Act, 28 U.S.C. 2071, where the Rule does not violate any Acts of Congress or any federal rules of practice and procedure adopted by the Supreme Court pursuant to section 2072; and Rule 701 does not violate the Supremacy Clause where it remains a federal rule prescribed pursuant to federal statute. Accordingly, the court affirmed the judgment. View "NAAMJP v. Lynch" on Justia Law

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Defendant was convicted of charges related to his involvement in prostitution and drug rings. This appeal presents an issue of first impression in this Circuit: whether a defendant’s right to effective assistance of counsel is violated when his counsel sleeps during trial. The court held that a defendant is deprived of his Sixth Amendment right to counsel when counsel sleeps during a substantial portion of the defendant’s trial. In this case, multiple witnesses testified that counsel was asleep during multiple occasions. The court concluded that the fact that counsel was sleeping during defendant's trial amounted to constructive denial of counsel for substantial periods of that trial. Furthermore, the facts of this case are equally -if not more - egregious than the facts presented in cases where other circuits have presumed prejudice. Accordingly, the court vacated the conviction and sentence, directed entry of judgment in favor of defendant on his 28 U.S.C. 2255 motion, and remanded for further proceedings. View "United States v. Ragin" on Justia Law

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NOM appealed the district court’s denial of its motion under 26 U.S.C. 7431(c)(3) to collect attorneys’ fees from the IRS. NOM had filed suit against the IRS seeking damages for unlawful inspection and disclosure of confidential tax information by IRS agents. NOM sought statutory damages, actual damages, punitive damages, and costs and attorneys’ fees. the district court concluded that NOM was not a “prevailing party” under section 7430(c)(4)(A) because (1) it did not “substantially prevail[] [in litigation against the IRS] with respect to the amount in controversy, or . . . the most significant . . . issues presented,” and, alternatively, (2) the government’s position in the litigation was “substantially justified” under 7430(c)(4)(B). The court could not say that the government acted unreasonably prior to the summary judgment stage of the litigation by waiting to see what NOM’s evidence was and then challenging its sufficiency. In this case, the government adopted a reasonable strategy in conceding statutory damages, but challenging the existence and amount of both actual and punitive damages. The court agreed with the district court that the government’s litigation position was “substantially justified,” which, by itself, is sufficient to find that NOM was not a “prevailing party” under the statute. Accordingly, the court affirmed the judgment. View "National Org. for Marriage v. IRS" on Justia Law

Posted in: Legal Ethics, Tax Law

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Columbus-America, acting as the agent for Recovery, discovered the wreck of the "S.S. Central America," which was loaded with tons of gold when it sank. The district court granted Columbus-America salvage rights. Robol represented Columbus-American in proceedings to establish salvage rights. Robol subsequently filed a claim in this in rem admiralty action to obtain a salvage award for himself, alleging that he had provided voluntary assistance to the Receiver in turning over files and documents related to the salvage operation, which proved useful in the continuing salvage of the sunken vessel. The district court dismissed Robol’s claim for failure to state a claim. The court affirmed, agreeing with the district court's conclusion that Robol had been obligated to return the files and documents to his former clients under the applicable rules of professional responsibility and principles of agency law and therefore that his act of returning the materials to his former clients was not a voluntary act, as would be required for him to obtain a salvage award. View "Robol Law Office v. Recovery Ltd. P'ship" on Justia Law

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The district court entered a Rule 60(a) clarifying order imposing sanctions on plaintiffs' attorney, Peter A.T. Sartin. Sartin hired the McNair Firm to represent him and to appeal the clarifying order, but the McNair Firm filed the notice of appeal two days late. The appeal was voluntarily abandoned. Sartin then filed a malpractice suit against the McNair Firm and the district court granted the Firm's motion for summary judgment. The court concluded that the district court's original intent was to impose sanctions on Sartin individually and, therefore, that the district court did not abuse its discretion in giving effect to that intent in its Rule 60(a) clarification order. Because the court concluded that the district court's earlier case properly employed Rule 60(a), the court affirmed the district court's conclusion in this case that the McNair Firm's failure to appeal the earlier Rule 60(a) clarification order caused Sartin no injury. The court disposed of Sartin's remaining arguments and affirmed the judgment of the district court.View "Sartin v. McNair Law Firm PA" on Justia Law