Search This Blog

Tuesday, January 03, 2012

Why It's a Problem that Justice Michael Gableman Didn't Pay His Attorneys.

Wisconsin’s ethically-challenged, right-wing, and corporate-backed Supreme Court Justice Michael Gaeleman has found himself in a new ethical quagmire as a result of, ironically, his actions in an earlier ethical investigation. At the center of the new ethics investigation is the fact that Gableman entered into a unique fee agreement with the high-priced Republican connected law firm, Michael Best & Friedrich, that represented him in the prior ethics investigation, whereby under no circumstances would he ever have to pay for the services the law firm rendered. After receiving tens of thousands of dollars in free legal services, Gablemen never disclosed the arrangement and continued to sit on cases where the law firm appeared before the high court where he often provided a decisive vote in favor of the firm’s clients.

Although Gableman and the law firm now seek to defend the odd arrangement as merely a “contingency fee” agreement, in reality, the arrangement had few of the characteristics of a traditional contingency fee arrangement.

A contingency fee is one whereby the fee charged depends upon the result obtained. The most common is the “No fee unless you win” tagline repeated by personal injury attorneys. Rather than charging a flat or hourly fee, the attorney is entitled to a portion of any recovery, often 30%. So if a person is injured in a car accident and has $10,000.00 in car damage, $25,000.00 in medical bills, and $5,000.00 in lost wages and therefore recovered $40,000.00 from the party responsible, the injured party walks away with only $28,000.00, while the attorney pockets the other $12,000.00. Both the attorney and the injured party gamble in making a contingency fee agreement. The injured party is gambling that the attorney is going to get at least 30% more than what he would have gotten on his own to make the attorney’s fee worthwhile, and the attorney is gambling that he will not only win the case (or more likely settle) quickly enough so that he does not end up having to really put in $12,000.00 worth of work.  

Although the personal injury action is the most common, in theory, a contingency fee could take a wide variety of forms. A party in a contract dispute could hire an attorney on the basis that he would receive a portion of any award or a higher hourly rate if the case was resolved by a certain deadline.

In a different category of contingency fee cases are certain cases where an attorney is entitled to fees as a matter of law. Perhaps the most common of these sorts of cases are civil rights cases where the statutes explicitly state that the court will award reasonable attorney’s fees to a prevailing plaintiff. This scheme is designed to encourage attorneys to represent persons whose civil rights have been violated, even when the dollar amount that might be attached to any injury might be small.

The agreement between Gableman and his attorneys, broadly speaking, fell into this category. In accordance with state law, if Gableman had been cleared of all wrongdoing, Gableman’s attorneys’ fees would have been paid by the state. But because Gableman was not exonerated, and instead the court deadlocked, unable to resolve the issue, his attorneys were not eligible to be paid by the state. Thus, his attorneys received nothing and Gableman got tens of thousands of dollars in legal services for free.

So why is Gableman’s arrangement any more suspicious than a contingency arrangement in some other instance where there is a fee shifting statute? The answer lies in the specific nature of Gableman’s case, Gableman’s role as a justice of the state’s highest court, and the law firm’s role regularly representing litigants before the state supreme court.

This was an ethics case where, for practical purposes, Gableman was the defendant. At stake was not merely his reputation but his career and elected office; if he lost the case, he could have been removed from the bench. His attorneys were going to be paid only if Gableman was exonerated. Thus, in accepting the odd compensation agreement, Michael Best & Friedrich were, in effect, betting that Gableman would be cleared of any ethical wrongdoing. The contingency fee agreement was essentially the law firm giving Gableman a blank check and devoting all the firm’s resources to him upon the belief that he was innocent of any wrongdoing. It is an incredibly powerful expression of loyalty to a jurist and one that a jurist is unlikely to soon forget.

It is for these reasons that it is inappropriate for Gableman to sit on cases where the law firm of Michael Best & Friedrich represents a party. Recusal is required whenever a reasonable person might question a judge’s ability to be impartial. Pay attention to that standard; it is not a standard whereby a reasonable person must believe the judge would actually be biased in favor of one side, but rather only that the circumstances would present a question of bias. The question of bias need not be answered in the affirmative before recusal is required. Recusal is required simply if it is reasonable to raise the question, and in the case of Gableman’s relationship with Michael Best & Friedrich, the question of bias is squarely raised.

In many ways, the contingency fee agreement is similar to a criminal defense attorney entering into a fee agreement with a defendant where the attorney gets paid only if the defendant is exonerated at trial. Because of the innumerable potential problems with an attorney investing such a significant personal interest in the outcome of a criminal proceeding, such contingency fee arrangements are explicitly prohibited by the rules that govern the conduct of lawyers. But Gableman’s case is even more ethically suspect because unlike the criminal defendant, there were no circumstances where Gableman was ever going to spend a dime on his legal fees. Win, lose, or draw, Gableman’s bill was zero.

In fact, the arrangement between Gableman and Michael Best & Friedrich could arguably be prohibited by the Wisconsin Supreme Court’s Rules, which govern all aspects of the legal profession. Wisconsin SCR 20:1.5(d)(2) prohibits contingency fee agreements “for representing a defendant in a criminal case or any proceeding that could result in deprivation of liberty.” In the due process context, courts have repeatedly held that interests such as the right to hold public office or the interest in government employment are liberty interests and these were all at stake in Gableman’s ethical investigation. So was the ethics investigation against Gableman a proceeding that could result in the deprivation of liberty such that the attorneys at Michael Best & Friedrich violated the Supreme Court’s ethical rules by entering into a contingency fee agreement with Gableman? Ironically, that’s a question the Wisconsin Supreme Court would ultimately be tasked with deciding.

No comments:

Post a Comment