BRENT RANDALL PHILLIPS, Petitioner, v. THE HONORABLE WILLIAM O’NEIL, PRESIDING DISCIPLINARY JUDGE, Respondent Judge, STATE BAR OF ARIZONA, Real Party in Interest.
No. CV-17-0122-SA
Supreme Court of Arizona
Filed December 20, 2017
Special Action from the Office of the Presiding Disciplinary Judge, No. PDJ2016-9128. JURISDICTION ACCEPTED; RELIEF GRANTED.
COUNSEL:
Ralph Adams (argued), Karen Clark (argued), Adams & Clark, PC, Phoenix, Attorneys for Brent Randall Phillips
James D. Lee (argued), Senior Bar Counsel, Attorney for State Bar of Arizona
Mark Brnovich, Arizona Attorney General, Dominic E. Draye, Solicitor General, Jennifer M. Perkins (argued), Assistant Solicitor General, Phoenix, Attorneys for Amicus Curiae State of Arizona
JUSTICE LOPEZ authored the opinion of the Court, in which CHIEF JUSTICE BALES, VICE CHIEF JUSTICE PELANDER, and JUSTICES BRUTINEL, TIMMER, and GOULD joined. JUSTICE BOLICK dissented.
¶1 This case concerns the application of
BACKGROUND
¶2 Disciplinary proceedings are currently pending against attorney Brent Phillips before the Presiding Disciplinary Judge (PDJ). Prior to these proceedings, the Arizona Attorney General suеd Phillips for violations of the
¶3 To resolve the Attorney General‘s CFA action, Phillips agreed to a consent judgment (Judgment). The Judgment waived Phillips’ right to a trial, admitted that his actions violated the CFA and a federal regulation, and required him to pay restitution, attornеy fees, and civil penalties. The Judgment also precluded its use in most other proceedings:
With the exceptions of paragraphs 12 and 13 above and the State‘s enforcement of this Consent Judgment, this Consent Judgment is not and shall not in any event be used as an admission or evidence of any alleged wrongdoing or liability by defendant Brent Randall Phillips, defendant Phillips Law Center, and defendant Farmer‘s Law Group in any other civil, criminal, or administrative court, administrative agency or other tribunal anywhere in the United States of America.
¶5 During attorney disciplinary proceedings before the PDJ, Phillips’ counsel moved in limine to preclude the State Bar from introduсing the Judgment into evidence for any purpose. The State Bar opposed the motion, arguing it should be allowed to use the Judgment to impeach Phillips’ testimony if it differed from the facts contained in the Judgment. The PDJ ruled in favor of the State Bar, allowing it to introduce the Judgment‘s stipulated facts (but not the sanctions) for impeachment purposes.
¶6 In his order, the PDJ recognized that the Judgment‘s terms precluded its use as an admission or evidence of any alleged wrongdoing or liability by Phillips. The PDJ concluded, however, that
¶7 We accepted special action jurisdiction because this case presents a legal issue of statewide importance that is likely to recur. We have jurisdiction pursuant to
DISCUSSION
¶8 Attorney disciplinary proceedings are neither civil nor criminal, but are sui generis, and the rules of evidence apply in such proceedings as far as practicable.
I. Arizona Rule of Evidence 408
¶9
Prohibited Uses. Evidence of the following is not admissible—on behalf of any party—either to prove or disprove the validity or amount of a disputed claim or to impeach by a prior inconsistent statement or a contradiction:
(1) furnishing, promising, or offering—or accepting, promising to accept, or offering to accept—a valuable consideration in compromising or аttempting to compromise the claim; and
(2) conduct or a statement made during compromise negotiations about the claim.
¶10 By its terms,
¶11 The dissent contends that if the drafters of
¶12 The dissent also claims that the rule‘s heading, Compromise Offers and Negotiations, limits its apрlication to evidence of offers and negotiations. ¶ 31, infra. Yet titles and headings are but tools available for the resolution of a doubt. But they cannot undo or limit that which the text makes plain. Bhd. of R.R. Trainmen v. Balt. & O.R. Co., 331 U.S. 519, 528–29 (1947); see also State ex rel. Romley v. Hauser, 209 Ariz. 539, 542–43 ¶ 16 (2005) (declining to find a statute‘s title persuasive when it was inconsistent with the text of the statute); Antonin Scalia & Bryan A. Garner, Reading Law: The Interpretation of Legal Texts 221–22 (2012) (stating that although titles and headings are useful navigational aids, a title or heading should never be allowed to override the plain words of a text). As discussed above,
¶13 Even if
¶14 Arizona modeled
¶15 According to the federal Advisory Committee on Rules of Evidence, the purpose of
¶16 Since the rule‘s adoption in 1975, federal courts consistently have held that
¶17 Likewise, in United States v. Austin, 54 F.3d 394 (7th Cir. 1995), the Seventh Circuit held that the district court did not err in admitting a consent decree to prove the defendant was on notice that his conduct was wrongful because, although
¶18 We agree with the foregoing cases interpreting
¶19 Here, the State Bar seeks to use the Judgment‘s stipulated facts to impeach Phillips’ testimony in disciplinary proceedings.
¶20 Moreover, the State Bar does not contend that it seeks to admit the stipulated facts of the Judgment for a purpose other than proving liability. Indeed, it seeks to use the stipulated facts to establish that Phillips’ advertisements violated the Arizona Rules of Professional Conduct. This is the type of use that every federal court addressing the issue has, to our knowledge, deemed violative of
¶21 Citing Uforma/Shelby Business Forms, Inc. v. NLRB, 111 F.3d 1284 (6th Cir. 1997), the State Bar argues that
¶22 The State Bar also contends that
¶23 Although Broadcort did not define same claim, the phrase has been defined in the claim preclusion context. We have previously observed that most federal courts, including the United States Supreme Court, have applied the transactional analysis of the Restatement (Second) of Judgments when the definition of a claim is legally significant. In re the Gen. Adjudication of All Rights to Use Water in the Gila River Sys. & Source, 212 Ariz. 64, 71 ¶¶ 20–21 (2006); see also Armstrong v. HRB Royalty, Inc., 392 F. Supp. 2d 1302, 1306–07 (S.D. Ala. 2005) (discussing how the same transaction test is consistent with the same claim requirement of
¶24 In this case, applying the transactional analysis leads us to conclude that the two proceedings at issue involve the same claim. Unlike the evidence in Broadcort, which concerned an entirely different loan transaction, the State Bar‘s claims here arose from the same set of operative facts underlying the CFA litigation. Specifically, both the Attorney General‘s lawsuit and the State Bar‘s disciplinary proceedings were brought to sanction Phillips for the advertisements he distributed. Although the sanctions Phillips may face from the State Bar differ from those in the civil proceeding the Attorney General brought, a difference in sanctions alone does not render a claim different fоr purposes of the transactional analysis. See id. ¶¶ 19–21. We therefore find that none of the exceptions to
¶25 The State Bar also urges the Court to hold, for public policy reasons, that
II. Arizona Rule of Evidence 613
¶26 The State Bar next contends that the Judgment is admissible under
¶27 In State v. Acree, 121 Ariz. 94 (1978), we held that prior inconsistent statements, unless inadmissible under some other rule, become substantive evidence usable for all purposes. Id. at 97 (emphasis added). Here, as discussed above, the Judgment is inadmissible under
¶28 The PDJ‘s order implied that the stipulated facts from the Judgment are nevertheless admissible under
CONCLUSION
¶29 We accept jurisdiction of this special action and grant relief by vacating the PDJ‘s order denying Phillips’ motion in limine. The PDJ is instructed to not permit use of the Judgment in the disciplinary proceedings.
PHILLIPS V. HON. O’NEIL/STATE BAR
JUSTICE BOLICK, Dissenting
BOLICK, J., dissenting.
¶30 When the Court finds it necessary to resort to federal cases, advisory commеnts to a federal rule, and multiple restatements to figure out what a rule of our own making means, something is seriously wrong.
¶31 I cannot join my colleagues in finding that
¶32 I acknowledge, as my colleagues ably demonstrate, that for purposes of policy or expediency, multiple authorities have interpreted the federal counterpart to
¶33 There is a far better approach. Unlike statutes and constitutional provisions, whose policies we are oath-bound to enforce, the Court is authorized by
¶34 Access to justice requires clarity in our procedural rules. We should unfailingly hold ourselves to the standard of rules that say what they mean and mean what they say. Construing
¶35 For the foregoing reasons, and with great respect to my colleagues, I dissent.
