Attorney Grievance Commission v. Katz
116 A.3d 999
| Md. | 2015Background
- Katz admitted to Maryland bar in 1983; 38-year career; suspended in Maryland for failing to file state taxes.
- Hearing judge found Katz willfully failed to file federal tax returns and underpaid federal taxes for 1996–2010, totaling about $2.5 million underpayment.
- Judgment against Katz entered in U.S. District Court for $5,462,935.25 with payment plan; Katz paid little to none initially.
- Katz filed late federal returns (14 years late) and underpaid taxes in 15 years; retained high income levels (often $500k+).
- Hearing judge concluded Katz violated 26 U.S.C. § 7203 and that conduct affected trustworthiness and fitness as a lawyer; judge found no 8.4(c) dishonesty finding.
- Maryland Bar Counsel sought disbarment; Court ultimately imposed disbarment and awarded costs.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Katz violated MLRPC 8.4(c). | Bar Counsel: repeated, willful failure to file and pay taxes is dishonest conduct. | Katz: lacks clear dishonest intent; 8.4(c) not satisfied. | Yes; 8.4(c) violated. |
| Whether Katz violated MLRPC 8.4(b). | Bar Counsel: conduct constitutes a criminal act reflecting on honesty and fitness. | Katz argues no criminal conviction required for 8.4(b). | Yes; willful tax violations support 8.4(b). |
| Whether Katz violated MLRPC 8.4(d). | Bar Counsel: willful tax conduct prejudicial to administration of justice. | Katz contends no violation of 8.4(d). | Yes; conduct prejudicial to justice. |
| Whether Katz violated MLRPC 8.4(a). | 8.4(a) violation as it arises from 8.4(b), (c), (d) violations. | Katz: no separate 8.4(a) violation beyond other subsections. | Yes; 8.4(a) violated as it is violation of the Rules. |
| What sanction is appropriate for Katz's misconduct. | Disbarment warranted due to extensive, willful, dishonest conduct. | Suspension up to two and a half years nunc pro tunc. | Disbarment warranted; costs awarded. |
Key Cases Cited
- Attorney Grievance Comm'n v. Atkinson, 357 Md. 646, 745 A.2d 1086 (Md. 2000) (repeated failure to file tax returns is dishonest; substantial duration supports 8.4(c))
- Attorney Grievance Comm’n v. Worsham, 441 Md. 105, 105 A.3d 515 (Md. 2014) (8.4(c) violation supported by willful failure to file/pay taxes)
- Attorney Grievance Comm’n v. Tayback, 378 Md. 578, 837 A.2d 158 (Md. 2003) (8.4(c) violation despite disputed intent when multiple years omitted)
- Attorney Grievance Comm’n v. Post, 350 Md. 85, 710 A.2d 935 (Md. 1998) (failure to remit withheld taxes; held reflective of fitness in 8.4(b))
- Attorney Grievance Comm’n v. Walman, 280 Md. 453, 374 A.2d 354 (Md. 1977) (willful failure to pay personal income taxes reflects adversely on fitness)
- Attorney Grievance Comm’n v. Angst, 369 Md. 404, 800 A.2d 747 (Md. 2002) (emphasizes honesty as central to fitness; willful misconduct can require discipline)