Commercial Litigation and Arbitration

Lawyer Suspended from Practice in S.D.N.Y. Pending Final Resolution of Disciplinary Charges

Further consequences of the misconduct found in Wolters Kluwer Fin. Servs. Inc. v. Scivantage, 2007 U.S. Dist. LEXIS 88052 (S.D.N.Y. Nov. 29, 2007) (discussed in our post of December 7, 2007): The sanctioned lawyer’s conduct has been found sufficiently egregious to warrant an interim suspension from practice in the Southern District of New York pending final resolution of the charges before the Committee on Grievances of the S.D.N.Y. From the opinion of Judge Rakoff as Chair of the Committee:

• [B]y Order To Show Cause dated January 30, 2008, the Committee directed Ms. Peters, pursuant to S.D.N.Y. Local Civil Rules 1.5(b)(5) and (d)(4), to show cause why the Court should not discipline her and, in the interim, suspend her temporarily from practicing before this Court. The Order alleged that Ms. Peters had violated the New York Code of Professional Responsibility, 22 NYCRR § 1200.1 et seq., by, inter alia: (i) engaging in conduct involving fraud, dishonesty, deceit or misrepresentation, in violation of DR 1-102(A)(4); (ii) knowingly making a false statement of fact or law, in violation of DR 7-102(A)(5); (iii) engaging in conduct prejudicial to the administration of justice, in violation of DR 1-102(A)(5); and, (iv) disregarding the ruling of a tribunal made in the course of a proceeding, in violation of DR 7-106(A). The bases for these violations were Ms. Peters' misconduct in (1) instructing an associate in her firm to alter or amend documents for the purpose of preventing their discoverability and then attempting to mislead the Court as to these events; (2) participating in a conference with the Court to adjourn a TRO hearing and discuss future depositions at a time when the respondent knew that those depositions and the TRO hearing would not take place; and (3) copying transcripts and ordering additional copies of transcripts in intentional disregard of court orders, and then using the transcripts in an action in Massachusetts in violation of the Court's Confidentiality Order.

• The preliminary remedy of an interim suspension is available in such instances to protect the public from future disciplinary violations of the respondent during the pendency of proceedings before this Committee.

• The interim suspension of respondent would be warranted on the basis of Judge Baer's findings alone. Such findings are commonly given preclusive effect in subsequent disciplinary proceedings. In particular, this is settled law in New York, whose disciplinary code (though not necessarily its law of collateral estoppel) is applied in the Southern District of New York. See, e.g., In re Abady, 22 A.D.3d 71, 77-78, 81 (1st Dep't 2005) (noting that the New York "Court of Appeals and numerous appellate courts in [New York] have upheld the use of collateral estoppel in [disciplinary] proceedings" and barring a lawyer from re-litigating before the disciplinary committee whether he had violated, inter alia, DR 1-102(a)(4), DR 1-102(a)(5) and DR 7-106(a) on the basis of findings that led to sanctions by the New York Supreme Court) (citations omitted); In re Osborne, 1 A.D.3d 31, 32 (1st Dep't 2003) (applying collateral estoppel to discipline a lawyer "based on the findings made in three unrelated civil cases in which monetary sanctions were imposed on [the lawyer] for pre-trial misconduct that exhibited disdain for the court," including one case decided by Southern District Magistrate Peck); In re Morrissey, 217 A.D.2d 74, 75, 79 (1st Dep't 1995) (applying the doctrine of collateral estoppel to facts found by the Southern District in a civil case).

• Moreover, even if collateral estoppel were inapplicable here, this Committee routinely accords substantial deference to the factual findings of the court that heard the evidence, for much the same reasons that an appellate court gives such deference, i.e., that the court that hears the evidence is in the best position to assess credibility.

• Ms. Peters clearly violated at least these three disciplinary rules. See, e.g., In re Hausch, 36 A.D.3d 141, 143, 145 (2d Dep't 2006) (by "failing to timely comply with one or more court directions," Hausch violated DR 1-102(a)(5); by "disregarding and/or advising her client to disregard a ruling of a tribunal made in the course of a proceeding" Hausch violated DR 7-106(a)); In re Goll, 27 A.D.3d 131, 133 (2d Dep't 2006) (by failing to produce a proposed judgment and necessary supporting documentation after being ordered to do so by the court, Goll violated DR 1-102(a)(5) and DR 7-106(a)); In re Hirsch, 231 A.D.2d 358, 360 (2d Dep't 1997) ("[b]y failing to comply with . . . discovery demands and court orders," Hirsch violated DR 1-102(a)(5)); see also, In re Stuart, 22 A.D.3d 131 (2d Dep't 2005) (lawyer violated DR 1-102(a)(4), (5) and (7) when, in response to a justice's question about the whereabouts of a witness, the lawyer falsely indicated that he had no knowledge of her whereabouts); In re Hock, 274 A.D.2d 130, 131 (4th Dep't 2000) (lawyer violated DR 1-102(a)(4) and (7) and DR 7-102(a)(5) when he "submitted a false expert disclosure statement and made false statements to the trial court and to defense counsel with regard to the availability and prospective testimony of the expert witness"); In re Bridge, 196 A.D.2d 43, 44 (4th Dep't 1994) (lawyer violated DR 1-102(a)(4) while representing a client in a criminal appeal when he "misrepresented to [the] [c]ourt on two successive applications for a stay of execution of the sentence that he had ordered the trial transcript and that [it] was being prepared" when in fact he had "failed to take the necessary steps to obtain the trial transcript in a timely fashion").

Final resolution of charges to await Second Circuit determination of sanctions appeal.

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