By Edward McIntyre
Cartoon by George Brewster Jr.
Macbeth ushered Todd McSweeney to the conference table.
“Let’s wait for Sara and Duncan.”
“Your castle, your rules.”
With everyone seated and introductions complete, Macbeth nodded. “Todd, from the beginning?”
“OK, but it’s complicated.”
Macbeth smiled. “I think we can handle it.”
“Well, I’m in these class actions. Not lead counsel or anything. But I’ve got a piece of the action.”
“Could you explain?”
“Sure. Rounded up a few class plaintiffs. Then referred them to class-action lawyers in Los Angeles. They filed the lawsuits. They’re lead class counsel.”
Sara interrupted. “State or federal court? Not that it makes any difference.”
“But good question. Massive case. Federal court. Judge Smiley. Pleasant enough, few times I’ve been in the courtroom.”
Macbeth asked, “Are you counsel of record?”
“Well, technically. I appeared for the plaintiffs I referred. But just that. To get notices and stuff. Participate in any fee award.”
“I see.”
“But it’s not like I sign pleadings or anything. Never stood in front of Smiley and said anything. When I’m in court, I sit in back. Watch. Federal court’s not my thing.”
“We have the picture. How can we help?”
“The class actions — several of them — settled. So, I’m about to see pay day. But there’s a hitch.”
Macbeth invited McSweeney to continue.
“One settlement requires class money go to Norwegian citizens. Crazy. Don’t ask me. It’s complicated. But that’s the requirement.”
Sara again: “What happens if there aren’t enough Norwegians filing claims?”
“Just what happened. We couldn’t find many Norwegian class members. Leftover money has to go to Norwegian charities with specific purposes. All spelled out.”
“Not all that unusual, in fact.”
“Really? Class actions aren’t my thing either.”
Macbeth intervened. “What’s the ethics issue, Todd? I assume that’s why we’re here.”
“We found a Norwegian charity. Fits the bill. Just crazy luck. No names, OK?”
“Call it Norge?”
“Good one. Norge’s ideal. Except for Norwegian law. Its lawyers say Norwegian tax authorities will grab a huge chunk of any award to Norge. Scandinavian tax systems!”
“So?”
“They’ve got an idea.”
“I’m afraid to ask.”
“Hey, this is privileged, right?”
“Attorney-client privilege. Also confidential under section 6068(e)(1). Feel free to continue.”
“I form a California corporation. With the exact name as Norge. Open bank accounts here. Deposit the award into those accounts. Then disperse funds as Norge directs.”
“Think Judge Smiley will approve?”
“If I don’t tell him? After all, I’m not making representations to the court. Not signing pleadings. What’s my risk?”
Sara spoke, “Rule 5-200 and section 6068(d) prohibit misleading a judge. But —”
“But I’m not making any representations to a judge —”
“I was about to add, without evidence of specific intent to deceive the court, you might escape a violation of the rule and section 6068(d). But that may not be your only risk.”
Macbeth added, “I agree. Let’s walk this through. Can we agree it would be material to a judge that he’s approving a settlement award, on its face paid to Norge, but, in reality, paid to a California corporation with the same name?”
“Well, maybe —”
“Let’s add. As part of a scheme to evade Norwegian taxes. Material now?”
“I guess … yes.”
“And although you didn’t represent that the money is going to Norge, you know the payee on the check will appear to be Norge. But the money goes to a California sound-alike. The court knows nothing about this scheme?”
“Something like that —”
“Likely you’ll endorse the check and deposit the money. Disperse it afterward.”
“That’s the idea.”
“At a minimum, you’ll ratify whatever false statement or half-truth or non-disclosure the other lawyers make about Norge as a recipient —”
“Ratify?”
“Yes. The State Bar Court has made clear that non-disclosure to a court is the same as a half-truth or misrepresentation.”
“OK, but —”
“And, as Sara said, section 6068(d) and rule 5-200 may not strictly apply; section 6106 could.”
“Section 6106?”
Sara spoke, “Acts of dishonesty and moral turpitude. Most recently, the Moriarty case.”
Duncan came alive. “Someone made misrepresentations to get him a continuance. He didn’t make any misrepresentations, but the court found he knew and ratified the conduct. Culpable of violating section 6106.”
“What happened?”
“Recently disbarred.”
“Ouch!”
Macbeth spoke, “Think you’ll need a different solution, Todd. We suggest absolute candor, whatever the consequence in Norway.”
“Thanks — I guess.”
Sara smiled and closed her notes.
Editor’s Note: All references to sections are to the Business and Professions Code. The case to which they referred is In the Matter of Moriarty (Review Dept. 2017) _Cal. State Bar. Ct. Rptr. _, Case No. 15-O-10406 (April 20, 2017), Supreme Court affirming disbarment on Sept. 21, 2017.
Edward McIntyre Read More
