State Ex Rel. Oklahoma Bar Ass'n v. Smolen

tion for reinstatement is filed.5 proceedings, reinstatement this Court licensing

functions exercising as a its

original jurisdiction. Recommendations panel

made the trial are advisory in Here,

nature.6 panel recognized the trial possibility for disparity. Its recommen-

dation attorney’s that the filing time for application

second for reinstatement run from the original date he applica- filed the ORDER IMPOSING DISCIPLINE tion for reinstatement should be followed. This matter is before imposition us for I would amend Rule to reflect the discipline. final Proposed Agreed Stipula- opinion express I today. tions of Fact and Conclusions of Law with

Agreed Recommendation for Discipline have been entered complainant into respondent. stipulations The and recom- mendation have accepted ap- been proved by the Trial Panel of the Profes- Responsibility sional (PRT). Tribunal The parties joint have filed a waiver of briefs requested and have this Court to follow Oklahoma, STATE ex rel. OKLA- recommendation of the PRT. ASSOCIATION, HOMA BAR By virtue of a two complaint count Complainant, complaint and amended respondent was charged with misconduct warranting pro- fessional discipline. stipulations re- SMOLEN, Respondent. Donald E. spondent agreed to are substantially as OBAD No. 1029. follows: SCBD No. 3778. AGREED FINDINGS OF FACT Supreme Court of Oklahoma. AS TO COUNT July 1992. 1. Between June 1989 and December

28, 1990, respondent $79,304.00 loaned 161 clients. During

2. respondent same time $1,481,000 gross earned receipts on $5,778,000, including share, client’s represented 1,600 more than clients. AGREED CONCLUSIONS OF LAW AS TO COUNT I Respondent’s conduct constitutes grounds professional discipline and mandatory provisions violated the Oklahoma Rules of Profes- Conduct, O.S.1991, sional App. 3- A, to wit: (e) representing While a client in connection pend- Here, attorney Samara, filed for reinstatement on State ex rel. Oklahoma Bar Ass’n v. May (Okla.1984). respondent engaged pro- has in ing litigation, lawyer shall not ad- determine warranting discipline guarantee financial assistance fessional misconduct vance or client, PRT and that the recommendation of the to a expenses of should be followed. advance or costs, including ex- litigation, IT THEREFORE ORDERED that the IS investigation, expenses of penses of proposed Agreed Stipulations of Fact and examination, costs of medical and ob- Agreed Conclusions of Law with Recom- evidence, taining presenting and ap- Discipline, hereby mendation for ultimately client lia- vided the remains Smolen, respondent, proved and Donald E. expenses. for such ble upon publication Imposing of this Order Discipline reporter in official shall AGREED FINDINGS OF FACT publicly stand censured. II AS TO COUNT respondent IT IS FURTHER ORDERED 11, 1987, August in # 1. On OBAD pay the costs of this in the amount matter 3382, respondent suspended # was SCBD (30) thirty days from the $281.75 within (8) eight this Court for months for date this order becomes final as a condition 1-102(A)(3) violating provisions of DR precedent right practice to his continued 9-102(B), and and DR Code of Profes- law. O.S.1981, Responsibility, sional Ch. App. 3 and Rule 1.3 of the Rules Govern- OPALA, C.J., HODGES, V.C.J., and O.S.1981, ing Disciplinary Proceedings, 5 LAVENDER, HARGRAVE, SIMMS and 1, App. 1-A. JJ., concur.

AGREED MITIGATION KAUGER, JJ., ALMA WILSON and part; part. dissent in concur by respondent 1. The loans made were bearing. Respondent loaned non-interest SUMMERS, J., dissents. money for humanitarian reasons destitute, clients were without other who KAUGER, Justice, concurring part, means and resources or credit to obtain dissenting during penden- loans for sustenance duty disciplinary proceed- This Court’s many cy disability of their and in cases ings protect public preserve and to injury. because of their could work legal profession and in its confidence judiciary licenses it. We should AGREED RECOMMENDATION nothing highest less than the de- tolerate FOR DISCIPLINE lawyer- gree integrity fidelity and respondent discipline As should receive relationship.1 Disciplinary proceed- client public censure from the Oklahoma Su- ings safeguard are instituted to the inter- preme Court. it, pre- public, protect and to est legal indicates re- serve the confidence of the matter Our review profession judicial system, the entire spondent voluntarily of his own free will stip- legal practitioner.2 We knowingly agreed proposed punish not to zealously promote regulation of the there is a factual basis there- must ulations and par- forgetting lawyers made bar without fore. No contention was process during the also entitled to due ties that Rule is unconstitutional. disciplinary proceedings.3 the matter we course of independent After review of Raskin, Proceeding torney Disciplinary Based Client: Bar Ass’n v. & 1. State ex rel. Oklahoma (Okla.1982). Attorney’s Upon Direct or Indirect Purchase of Property,” Client’s 35 A.L.R.3d Stubble ex rel. Oklahoma Bar Ass’n v. 2. State (Okla.1988); field, State ex rel. 766 P.2d Lobaugh, Oklahoma Bar Ass’n v. 3. State ex rel. Evans, Oklahoma Bar Ass’n v. 747 P.2d 28 (Okla.1988). Annot., (Okla.1987); “At- 85 A.L.R.4th Overreaching pecuniary gain by manitarian, bearing non-interest loans to attorney vigorously investigat- should be destitute only clients.5 Because the differ- discipline imposed ed warranted. courting ence between recep- clients with by returning would ensure this parties helping result tions and dinner a desti- existing January the rules through before tute client bearing a non-interest pass constitutional muster.4 Howev- compassion, loan is one of and because it er, the majority opinion imposes appears 1.8(e) that Rule of the Oklahoma respondent, censure on the Donald E. Smo- Rules of Professional Conduct6 violates len (Smolen/attorney), providing hu- both the Oklahoma and the United States 10, O.S.1961, 3, 6, Don, App. get My Rule Ch. see note I released Jan I owe a fine. infra; 42, O.S.1961, App. manager Rule Ch. see pay case will take me down the fine prohibit get my sorry, note infra. These rules would not and license back.- I’m but after See, death, my really the kinds of advances made here. In re Son’s I didn't know it was (N.D.Ohio Ruffalo, F.Supp. sign paper, anything owned. Please I’ll I’ll and, 1965). there, my job, get lose if I can't don I way get won’t even have a to there to talk to license, Suspended my Richard with this is pleadings 5. An affidavit and a letter attached to feet, only get my chance to back on I have a submitted to Court this show the humanitarian job-car-apt-all pay I need $500.00 is to signed by nature of the loans. An affidavit fine. Johnny Ray provides: Jones me, my only hope please help Your Don so I “I, JONES, years JOHNNY RAY am 31 old try my again. can and start life Jones; and married to Arlise children, Clark, we have two money my manag- You can send the here case Jr., age years, Johnny and arrangements er will make me, with a C.O. to take age represented nine Mr. weeks. Smolen has pay get it and them renewed. my family years my legal for at least 15 on all Don, my only your Please this is chance and problems. I look at Don Smolen as a friend my only it, hope. promise you get I will I’ll 6, 1989, lawyer. before a On November I payments anything. My job make is here in keep my asked Mr. Smolen for 100.00 to f City....” Then, gave utilities on. He it to me. February, I $60.00 borrowed more to 6.Rule Oklahoma Rules of Professional help my me on rent. Mr. Conduct, Smolen never O.S.1991, 1, App. provides: Ch. 3-A charged any helped me interest and he me representing “While a client in connection job my when I had no and was down on luck. pending litigation, with lawyer always my lawyer.” He will friend and guarantee shall not advance or finan- A letter written on December client, except lawyer cial assistance to a that a signed by Stage provides Marsha may expenses advance or of costs, litigation, including expenses of Don, out, please help bought "... me I a car investigation, expenses of medical examina- 1,000 payed my my on Son’s funeral kid tion, bill— obtaining presenting and costs of License, get my Xmas. I have to in order to evidence, provided the client remains ulti- that, pay do I have to a fine. Don I have no mately expenses.” liable for such money except apt. to rent an I leave here in 3 adopted by When this rule was the Court in home, place wk. no with I have to have a portion I dissented from this stay. prison I will come back to if I drive and posed prohibition against advancing rules. The get stopped. getting job I’m here at C.S.U. guaranteeing financial assistance to a client only get pd. I’ll once a mo. appeared part first as a of the Oklahoma Code get my pay I have to license renewed and Responsibility January Professional on fine, this, my I did not know I owed case subject to an order entered this Court manager checked So I can have and I.D. be- time, on December 1969. Prior to that con- Don, you my only hope, fore I leave. are I prohibitions against stitutional conflicts of in- get money 10, O.S.1961, have no one I can from. place. terest were in Rule Ch. please, go Please loan me I will back App. provides: $500.00 — prison get stopped. the first time I “Acquiring litigation. This is lawyer Interest in The emergency, promise pay you $100.00 I I’ll purchase should not interest in the sub- back, payed my ject a mo. until it is You also have matter of the which he is con- fund, Indemnity already yr. ducting.” I’ve lose 2½ life, 42, O.S.1961, my everything App. provides: I had. here, my “Expenses litigation. All I have is what in locker & a car A go trying properly agree out to. I need a I'm real with a client that the chance. things right, job waiting pay expenses litigation; hard to do I have a I shall or bear the he it, get suspended go good expenses can’t on license's I faith advance as a mat- back, convenience, jail, promise pay you I will it can ter of but to reimburse- you check here if like. ment.” reducing proposed price and the draft of far below the sale Constitutions bona-fide (Third) Governing profits. to the Restatement the tenant’s cham- As tenants Lawyers,7 pert, I dissent. nobles were entitled to share profits grantor.13 the rents and with the Apparently, grounded rule champterty The laws maintenance and champerty and maintenance. doctrines of protect were introduced to the commoner concepts is nec- brief discussion these against growing power nobles.14 essary understanding to an the rule. However, it was not mainte- considered common roots of the doctrines of The poor nance for a rich man to assist a man champerty deeply em- maintenance and money or advice in order to enable present bedded. basic notions were action, bring him to or defend an legal development of ancient Greeks given charity.15 assistance was out of Romans, deeply in- they became attorney It was not for an maintenance grained England. in the medieval law of money take expend for his advice or to against champerty Movements the use of client, money his it be re- was to against feu- and maintenance were a revolt paid.16 prohibitions against The mainte- required support dal institutions which champterty nance and were instituted to magnate despite the retainers of a feudal prevent churning up litigation, the the particular justification the of a action.8 courts, clogging protect and to the agreement, champertous is one which a convolution, people. strange pro- In a lacking person an interest another’s liti- 1.8(e) against hibition a gation personal gain. finances the suit for providing financial assistance to a client intermeddling in liti- Champerty is officious places mercy now client at of more by gation which one has no interest wealthy opponents system. and of the In- assisting prosecution its with the intent being rendering up forced into stead compensation proceeds of derive from the lord, portion modern-day of land to a the suit.9 litigant may be forced into an unfair settle- early prohibition against As by pressures. ment economic champerty applied maintenance and was prohibits Title 21 O.S.1991 55417 attor- royal officers.10 These restrictions were neys engaging champertous from acts imposed despotism.11 to check Lords and by purchasing any evidence of debt with large purchased other land holders contest- instrument., another, the intent to sue on the How- against against claims one ed ever, living defense, loans to destitute clients for commoners. As a the commoners expenses pending the outcome of conveyed portion of their interest in land champer- powerful lord to maintain their have been found not to constitute to some 18 powers grew,12they paid ty if the loan occurs after the especially suit. The nobles’ 14. Hobson, 7. (Third) Governing Lawyers, Hovey The v. see note 12 at 65. Restatement draft no. see note infra. tentative Odgers, England, W. The Common Law v. 15. Radin, by Champerty,” 2 8. B. "Maintenance Maxwell, (Sweet 1911). p. 200 & Ltd. also, 48-49, (1935-36). See Mar Calif.L.Rev. Inc., Morgan Away, v. Drive 665 F.2d tin State, 11, supra. Lytle 16. v. see note (5th Cir.1982). 9. Martin v. Inc., Morgan Away, see note Drive 17. provides Title 21 O.S.1991 554 Seed, supra; Savage Ill.App.3d v. (1980). Ill.Dec. 401 N.E.2d directly “Any attorney who either or indirect- 1275; Radin, 10. Statute of Westminster I of M. buying any ly buys or is interested in evidence by Champterty," see note 7 at 62. "Maintenance thing bring of debt or in action with intent to misdemeanor_” guilty suit thereon is of a State, Lytle 17 Ark. 608 Detroit, Dombey, Tyler, & Grieser v. Richards Hobson, Hovey Me. Co., R.R. 351 F.2d Toledo & Ironton 13. B. Radin, by Champterty," “Maintenance see Cir.1965). (6th 60-61, supra. note 8 at relationship dy.

attorney-client court-adopted has been estab- It held that a disci- bar Making plinary placed lished.19 a loan to a client to cover rule which an unreasonable living expenses against upon right burden an en- necessary is not individual’s might force claims public policy20 necessarily unethical con- allowed violate duct, the constitutional of access to per se.21 courts.23

In Louisiana State Bar Ass’n v. Ed wins, Supreme (La.1976), California Court has 329 So.2d the Lou adopted expressly adopts a rule which Supreme isiana Court considered whether a position Supreme taken the Louisiana disciplinary rule22 identical to Rule Edwins. Court in Rule 5-10424 of the Cali- prevented attorney from retained advanc Edwins, fornia Rules of Professional Conduct ing money client. to a attorney prohibited vides is not attorney approximately had advanced loaning money from to a client $3,000.00 money to a client who used the promise repay of the client to the loan once living expenses, prevent a fore attorney employed.25 has been Minne- closure, pay and to for medical treatment. adopted sota has a rule most suited to the Supreme The Louisiana Court found that protection client. Rule 1.8 of the spirit neither nor the intent of the Minnesota Rules of Professional Conduct disciplinary rule was violated the ad provides pertinent part: guarantee by lawyer vance or a retained to (c) lawyer provide “... shall not finan- living expenses, a client of minimal of mi cial assistance to a client in connection necessary prevent nor sums to fore pending contemplated litigation with or closures, necessary or medical treat ... ment. The Court went on to find that a (3) lawyer may guarantee construction of the statute which led to a a loan rea- holding prohibited sonably the advances were needed to enable the client put jeopar- the rule in delay litigation would constitutional withstand in that would 816, Bar, evidence, enting provided 19. Hildebrand v. State 18 Cal.2d 117 the client remains 860, (1941); ultimately expenses.” 863-64 Johnson v. Great liable for such Co., 365, 125, Ry. Minn. Northern 128 151 N.W. play 23. Economic duress come into when (1915); Co., Mytton v. 127 Missouri Pac. R.R. parties disproportionate bargaining power 111, have (1919). 211 S.W. 113 person and the with no reasonable alternative See, pressure. McCollum, 578, succumbs to settlement Centric People 341 Ill. 173 N.E. Co., 411, Corp. 827, (1930). Morrison-Knudsen 731 P.2d 831 Here, (Okla.1986). there is no assertion attorney 443-44, pro- that the ever Ruffalo, instituted collection supra. In re see note 4 at also, Dawson, 427, cedures to collect the loans or forced their re- See State v. 111 So.2d Annot., payment. (Fla.1959); “Validity Propriety & of Ar rangement by Attorney Pays Which or Advances Client," 1155, Rules, Expenses provides 8 A.L.R.3d Professional Rule 5-104 (1966); Comment, Living pertinent part: “Loans to Clients for 1419, Expenses,” 55 Calif.L.Rev. “(A) A member of the State Bar shall not see, Kandel, Attorney But Grievance Comm’n v. directly indirectly pay agree pay, or or 387, (1989); 317 Md. 563 A.2d Shea v. guarantee, represent repre- or or sanction the Bar, Virginia State 236 Va. 374 S.E.2d pay personal sentation that he will or business (1988); Carroll, Matter 124 Ariz. client, expenses by prospec- incurred or for a (1979); Berlant, In re Pa. existing prior tive or employment and shall not his denied, (1974), 328 A.2d cert. enter into discussion or oth- U.S. 95 S.Ct. 44 L.Ed.2d 451 prospective er communication with a client regarding any payments agreements such or provided: 22. The rule under consideration pay; prohibit this rule shall not representing “While a client in connection member: pending litigation, employed, ... after he has been from guarantee shall not advance or finan- lending money to his client the client’s client, except cial to his assistance that the promise writing repay such loan ...” guarantee advance or the ex- costs, penses litigation, including Responsibili- ex- 25. The Texas Rules of Professional penses investigation, expenses ty prohibition against lending of medical contain no examination, obtaining pres- money and costs of to a client. state, put pressure territory jurisdiction on the otherwise substantial ” client to settle a case because of financial United States.... merits, hardship rather than on the 1.8(e) unconstitutional, Because Rule dis- ultimately vided the client remains liable cipline imposed may not under the Rule. repayment regard of the loan without 1.8(e) potentially sec- violates several and, to the outcome of the fur- tions of both the United States Constitution provided, promise ther that no of such equal and the Oklahoma Constitution —the made to the financial assistance was Const, clause, protection United States lawyer, client another XIV, 1;26 courts, amend. access to Okla. § lawyer’s prior employment to the behalf Const, 6;27 clause, special art. § lawyer by of that the client ...” Const, 46;28 privileges Okla. art. § Const, clause, This rule allows an advocate and immunities Okla. art. might loan a client who otherwise be 51;29 the First Amendment of the United § Const, unfair forced into an unwanted or settle- Constitution;30 States the Okla. art. Const, ment. It ensures that the client is able to 2;31 and the Okla. art. 15.32 maintain cause to its conclusion. his/her interesting It is to note that the concur- required We are under O.S.1991 ring opinion agrees position with the ex- 2201(A) judicial to take notice of the admitting pressed here while that Rule United States Constitution and Consti- pass won’t constitutional muster. Title 12 tution of State Oklahoma. However, protections these constitutional provides O.S.1991 § applied lawyer. must be to this We are charged duty “A. Judicial notice shall be taken with the to take no- law, law, court of the common constitutions tice of the common constitutions every public requirement statutes force statutes.33 to take Const, XIV, any rights, privileges, amend. exclusive or immunities § 26. The United States part: provides within this State.” in persons 1. All born or naturalized "SECTION Const., provides: 30. The United States amend. 1 States, juris- to in the United and the "Congress respecting shall make no law thereof, diction are citizens of the United religion, prohibiting establishment of or the they States and of the State wherein reside. thereof; abridging free exercise or the free- any No State shall make or enforce law which speech, press; right dom of or of the or the of abridge privileges shall the or immunities of assemble, people peaceably peti- the to and to States; any citizens of the United nor shall griev- for a redress tion the Government of life, deprive any person liberty, or State ances.” law; property, process without due nor jurisdiction deny any person to within its the Const, provides: 2§ 31. The Okla. art. laws_” protection equal the religious “Perfect toleration of sentiment shall secured, and no inhabitant of the State Const, provides: art. 6§ 27. The Okla. person property be molested in or shall ever justice of the State shall be “The courts religious of his or her mode of on account every speedy open person, to and and certain worship; religious and no test shall be re- every wrong remedy afforded for and for quired political for the exercise of civil or every injury person, property, reputa- or to rights. Polygamous plural marriages or are tion; right justice shall be adminis- prohibited.” forever sale, denial, delay, preju- tered without Const, dice.” provides: § 32. The Okla. art. law, attainder, pose ex facto nor "No bill of Const, provides in § 28. The Okla. art. contracts, any impairing obligation law the pertinent part: passed. shall shall ever be No conviction not, Legislature shall as otherwise "The corruption of blood or forfeiture of work a Constitution, any pass in this local Provided, provision not estate: that this shall special authorizing: penal- prohibit imposition pecuniary the Regulating practice the the ... before ... ties.” courts ..." provides perti- Title 12 O.S.1991 Const, provides: Okla. art. 29. The nent pass granting Legislature to “A. notice shall be taken the "The shall no law Judicial law, association, corporation, court of the common constitutions or individual responsible them. judicial notice of the constitution is mandat We are the institution ory.34 required the to public The notice Court for the continued confidence the provisions may take of constitutional be practicing disciplining bar. The of attor- proceeding.35 any stage taken at of a We neys public great is a issue of interest.39 previously recognized duty have the to take may ignore posi- We the untenable constitutional, fundamen notice of of an attorney disciplinary tion faced with disciplinary proceedings in rights tal duress, proceedings. Because of economic ex rel. Bar Ass’n v. Lo State Oklahoma attorney, believing even there is (Okla.1988). In baugh, 781 P.2d charge, may opt valid defense to Lobaugh, we addressed the issue of a law plea bargain form of a to take humiliat- yer’s right during hearing to be heard ing, embarrassing sanction the form so, panel. doing before a trial the Court public of a rather censure than face total right stated that even if the issue of the jeopardy and the unknown. Faced with de preserved properly be heard had not been review,40 attorney opt may novo for an panel, before the trial it would have fallen unpalatable compromise simply in an effort remedy to this miscar Court to manifest get the Bar Association removed from riage process. of fundamental due process. jurisprudence It is well established our Nevertheless, attorneys should not be public law issues be resolved allowed to ‘pecuniary gain by establish a application legal theories not ten- overreaching. This result can be avoided duty dered It is this Court’s below.36 by reinstitútion of Rule 10 and Rule 4241or public protect wrongful it from the adoption proposed 48 to the unscrupulous acts of and dishonest attor- (Third) Governing Lawyers Restatement neys.37 power prescribe The exclusive which restricts advances to clients to cir- conduct, discipline attorneys, rules for cumstances in which a loan is “... needed practice and to revoke licenses to law rests delay to enable the client to withstand impose this tribunal.38 We cannot might unjustly that otherwise in- practicing rules bar which we duce the client to settle or dismiss a recognize as when case unconstitutional we hardship of financial the final arbiters of those rules and the because rather than only entity power to alter cloaked with on the merits.”42 state, law, every territory practice statutes in force in this Court unlicensed re- jurisdiction importance and of the United States....” fered to "the of the issues raised to justice the due administration of and to the normally Legislature 34. Use of "shall” is protection public of the welfare.”]. legislative equivalent considered as a mandate "must,” requiring interpretation to the term as a Lacoste, 40. State ex rel. Oklahoma Bar Ass'n v. Odom, 449, command. Fuller v. (Okla.1987). 741 P.2d 453 501, (Okla.1991). 813 P.2d 503 10, O.S.1961, 1, 3, 6, App. 41. Rule 5 Ch. see note provides perti- Title 12 § 2203 O.S.1991 42, O.S.1961, 3, supra App. and Rule 5 see part: nent 6, supra accompanying note discussion. may "... C. Judicial notice be taken at stage proceeding." of a (Third) Governing Lawyers, 42. The Restatement McNeely, 36. Matter 734 P.2d 1296 10, 1991) (April tentative draft no. 48§ (Okla.1987) C.J.]; by Opala, Davis v. [Authored vides in Davis, (Okla.1985) (Over- 708 P.2d 1104 Client-Lawyer "§ 48. Forbidden Financial grounds.) by Opala, ruled on other [Authored Arrangements CJ.]. (1) acquire proprietary A not a cause interest of action or mat- Rice, 37. In re 167 Okla. 29 P.2d 599 litigation lawyer conducting ter of that the client, except lawyer may: for a that the O’Bryan, 38. State ex rel. Oklahoma Bar Ass’n v. (a) Acquire provided by a lien as § 55 (Okla.1963), denied, 385 P.2d rt. ce lawyer’s expenses; secure the fee or U.S. S.Ct. 11 L.Ed.2d (b) contingent Contract with a client for a See, Hert, except prohibited fee in a civil case when R.J. Edwards v. 504 P.2d (Okla. 1972) [Concerning questions relating to stated in § 47. Const, terpart. The Neither the United States Constitution Okla. art. guarantees justice nor of the the courts of shall the Constitution State of Okla- open Adoption every person. homa the effective date a delineate rule the draft of opinions. Subject exceptions, to limited consistent with de- attorneys’ would allow to ensure that the given retrospective cisions at were effect open courthouse for their stay doors eco- Supreme common law.43 The United States nomically litigants. disadvantaged The broadly Court has endorsed variations require any attorney rule would not loan juristic philosophy involving retrospective However, money to it any client. would prospective decisions.44 The decision allow an a attorney to make a loan to client apply retrospectively a new rule is one to ensure that the client is not forced into judicial policy.45 application Retroactive early disadvantageous an settlement newly of a is the announced rule traditional defendant, strong powerful arm of a approach, common-law ráther than the ex- thereby reinforcing public confidence ception.46 determining give whether to system. adversarial retrospective a rule application, fac- three 1) tors are considered: whether rule law; 2) principle announced is new OPALA, Justice, Chief with whom retrospective application

whether would re- HODGES, Justice, joins, Vice Chief rule; 3) operation tard of the and whether concurring. produce application retroactive would an professional In this Bar prosecution for inequitable language result.47 The misconduct, the court visits censure clearly change prior new rule would Respondent-lawyer, approving language allowing of rule client sanction counseled the Professional Re- loans in restricted circumstances. Retro- sponsibility body That rested Tribunal. its spective application of the new rule would parties’ recommendation on the submission operation produce ineq- its retard by stipulated agreed and on their facts uitable result. charges discipline. choice The under urge our would revisitation of rule Respondent’s consideration from stem loan- 1.8(e). adopt should making We version similar clients violation proposed 1.8(e).1 legal prac- prohibits the Restatement’s 48 in rule cited place presently providing of its unconstitutional coun- titioners from financial assis- Inc., Int'l, lawyer guarantee not make or 45. McGehee 776 P.2d v. Florafax (Okla.1989); Thompson Presbyterian pending in connection loan to a client Inc., (Okla.1982). Hosp., lawyer is con- 652 P.2d client, ducting that the Inc., Brockway, 46. Cox v. may: (Okla. 1985). (a) covering Advance or loan expenses litigation, court costs and the re- Comm’n, Kay Coop. 47. Elec. Tax v. Oklahoma payment lawyer may to the of which be con- 175, (Okla.1991); v. 815 P.2d 177 McGehee Florafax matter; tingent the on the outcome of 'l, 854, supra. see note 45 at Inc. Int terms, (b) guarantee loan Make or on fair repayment the of which to be 2, 6, 27, see note 48. The Okla. Const. art. matter, contingent of on the outcome supra. to enable loan is needed the client to delay 1.8(e), Conduct, withstand in that otherwise 1. Rule Rules of Professional 5 O.S.1991, 3-A, might unjustly 1, the client induce to settle or App. provides: hardship of dismiss a case because financial representing "While a client connection merits_” rather than on litigation, pending lawyer shall not advance finan- 505, Neil, 507, U.S. 43. Robinson v. 409 93 S.Ct. client, except that a cial assistance to a 29, (1973). 32 35 L.Ed.2d expenses guarantee the of advance or costs, expenses litigation, including court Sunburst, investigation, expenses 44. Co. v. U.S. of medical examina- Great Northern R. 287 360, 366, tion, obtaining presenting L.Ed. S.Ct. and costs of evidence, (1932). client remains ulti- A.L.R. I narrowly clients, certain tance today’s im- I concur instances.2 defined PROCEEDINGS IN DISCIPLINARY I discipline and recommended position of COURT A LAWYER THIS AGAINST I un- explain why am separately to write BAR-INVOKED TEST WILL NOT calls for this join the dissent which able to FOR CONFORMITY ETHICS RULES LAW, of Rule retrospective invalidation ABSENT court’s TO FUNDAMENTAL TIMELY CHAL- infirmity RESPONDENT’S 1.8(e) grounds of constitutional on LENGE My Respondent’s exoneration. and for Rule reexamination of is that a counsel legislative-type 1.8(e) via a Bar’s be done Of Consideration Upon Sponte Limits Sua acting sua by this court study rather than Issues And Public-Law Constitutional through process judicature sponte con- Respondent’s The dissent concludes effect retro- employs jurisprudence to champer- as neither should be viewed duct profes- in the rules spective changes3 policy, nor unethical against public tous or sional ethics. 1.8(e) se, contravenes Rule per because law. While and federal fundamental state merit, I utterly without position this FACTS CRITICAL 1.8(e)’s calling for Rule join today cannot record,4 Respondent According to the retrospective invalidation. $79,304.00 161 different made loans of of a constitu- sponte consideration Sua period. He during 18-month clients neither advanced question which was tional his conduct violates concedes in the record preserved nor by the briefs the loans mitigation interposes constitu- precepts cardinal offends two made to interest and were a court should never adjudication: did not bear tional question ad- fundamental-law decide a humanitarian reasons. clients for destitute RECOMMENDATION (Emphasis LAW WITH AGREED expenses.” OF mately for such liable added.) DISCIPLINE are: FOR " * * * FACTAS TO FINDINGS OF AGREED Okl., Boettcher, e.g. v. Bar Ass’n 2. See Oklahoma COUNTI 798 P.2d 6, 1989, and December Between June 5. the Bench and Bar is Shaping ethics rules for 3. $79,304.00 28, 1990, Respondent loaned Supreme exercise Court’s constitutional different clients. Virginia legislative power. Supreme Court v. Respondent During this same time States, United 446 U.S. Union Consumers $5,778,- $1,481,000 gross receipts of on earned 1967, 1974, 719, 731, S.Ct. L.Ed.2d share, represented including client’s Okl., Ass'n, (1980); Tweedy Oklahoma Bar 1,600 clients. more than (1981). Lawmaking AS TO OF LAW AGREED CONCLUSIONS function, Legislature or whether COUNT court, conformity to our be carried out in must man- Respondent’s conduct violated the legislation may not Constitution. Substantive datory Oklahoma provisions of Rule in a changed govern claim or * * * defense Conduct, to wit: Professional Rules of judicial proceeding. Art. Okl. pending MITIGATION AGREED begun of sub- proceeding under norms Const. A by Respondent were The loans made statutory then in force remains stantive Respondent bearing. loaned non-interest changes. legislative by after-enacted unaffected money reasons to clients for humanitarian Const.; Bank Pauls First Nat. Art. Okl. destitute, means and without other who were Okl., Valley Crudup, suste- loans for or credit to obtain resources during pendancy of their dis- [sic] nance legisla- this court dissent would have effect many ability could not work and in cases our Bar change norms * * in the substantive * tive injury. of their because apply pending case in to this and make it ethics DISCI- FOR AGREED RECOMMENDATION 54, 5, 52 and Okl. §§ Art. contravention of PLINE Const. matter, Respon- discipline this in 11. As the a censure from dent should receive provisions the AGREED 4. The ” * * * Supreme Court. Oklahoma CONCLUSIONS FACT AND STIPULATIONSOF

903 Reynolds here. Our site necessity of strict nor formulate a vanee freedom of constitutional law broader than is norm sponte dispositive public- choose sua the required by precise the facts to it is theory wrong proffered when a one is (2) applied5 and a court should not to be identifying does not extend to a constitu- Reynolds Spe- v. overstep the limits of the urged by aggrieved tional not the flaw7 Indemnity cial exception. Fund6 party either here or below. Unlike juris- Reynolds public-law teaches that if in a infirmities, presence dictional into whose brief ad- controversy aggrieved party’s the they we must examine even when are not reversal, vances wrong the for the reason urged upon by parties,8 us constitution- is free to grant corrective reviewing appel- al flaws not be corrected in the urged applica- error on an relief from sponte. sua process late theory ble chosen sua sponte i.e., a theo- — Respondent stipulation entered into a assigned error but ry supports Bar, questions with the which neither appeal neither below nor on was advanced 1.8(e)’schamperty outer limit of Rule defi- dispositive by and is the issue raised aggrieved party. Reynolds inappo- applicability nition9 nor its to the instant (1986), Reynolds public- prudential necessity, application rule of adhered to 5. The of the courts, commands that con exception. all state and federal law issue advance stitutional issues not be resolved in 634, necessity. Snyder, strict In re 642- 472 U.S. jurisprudence allowing public-law 7. Extant in a 2874, 2880, 643, (1985); 105 S.Ct. 86 L.Ed.2d 504 controversy consideration of theories that were Arcades, Inc., 491, Spokane Brockett v. 472 U.S. presents question. See not briefed a different 2801, 501-502, 2794, S.Ct. 86 L.Ed.2d 394 105 Okl., McNeely, (1987); Matter 734 P.2d 1294 Chadha, 919, 937, (1986); I.N.S. v. 462 U.S. 103 Davis, Okl., (1985). Davis v. P.2d 708 1102 In 2764, 2776, (1983); Ash 77 L.Ed.2d S.Ct. 317 Davis, McNeely challenges both we con Valley Authority, v. Tennessee wander 297 U.S. sidered were raised below. What we 288, 347, 466, 483, (1936) S.Ct. 80 L.Ed. 688 56 independent argument support there was J., (Brandeis, In re Initiative Peti concurring); challenges parties pressed for reversal of 639, Okl., Question No. State No. tion 347 813 examples the trial tribunal’s decision. These C.J., 1019, (1991) concurring); (Opala, P.2d 1037 distinguishable presented by from that Okl., Westinghouse Corp., v. Elec. Smith 732 assigned case. Here no error was either below Diehl, 466, (1987); v. 3 Schwartz P.2d Okl., 467 n. appellate or in the court. Neither does extant 280, (1977); Dablemont v. 568 P.2d 283 authority permitting, public-law case in a con State, Department Okl., Safety, Public 543 troversy, consideration of a constitutional issue 563, (1975); see also Davis v. B.F. P.2d 564-565 prius support not dealt with at nisi lend to the Goodrich, Okl., 587, (1992) P.2d 826 dissenting view. constitutional flaw C.J., re Initiative Petition (Opala, concurring); cases, though urged reached in those 348, Okl., 772, 781, (1991) No. P.2d 782 n. 4 820 tribunal, assigned clearly was as error be trial C.J., result); concurring Johnson v. (Opala, appellate e.g. court. See Simons v. fore Walters, Okl., 694, 708, (1991) P.2d 712 n. 26 819 Okl., Storage, Brashears 344 P.2d Transfer C.J., concurring dissenting (Opala, part and 1107, (1959); First Nat'l Bank v. Southland 1113 Lobaugh, ex rel. Okl. Bar Ass’n v. part); State Co., 9, 1087, (1941), Prod. Okl. 112 P.2d 1098 189 Okl., 806, J., (1988) (Opala, dissent 781 P.2d 813 State, 11, citing Magnolia Co. v. Pet. Okl. 175 52 341, Okl., ing); In re Initiative Petition No. 796 Refining Co. (1935), Oil & v. P.2d 81 Shaffer V.C.J., (1990) concurring (Opala, P.2d 275 Treasurer, County (1935). P.2d 175 Okl. 52 76 result). challenge ad- If no constitutional has been sponte sua inquire 8. This court must into its vanced, the dictates of fairness are not im- Co., Inc., Okl., jurisdiction. Cate v. Archon Oil sponte the court’s denial of sua pugned con- Hill, Okl., (1985); Pointer v. P.2d 1356 do not reach constitutional "We sideration. (1975). 536 P.2d questions Stein, parties.” v. not raised Mazer U.S. 206 n. 74 S.Ct. Champerty a is the ancient name for doctrine mine); Andrews (emphasis L.Ed. 630 trafficking prohibits person from in an Company, v. Louisville & Nashville Railroad litigation interest. Black’s Law Dictio other’s 324-325, 92 S.Ct. U.S. nary bargain by stranger it as: "A defines also, Benjamin (1972). See L.Ed.2d 95 Cardozo, suit, by person party which such third to a (1921); the Judicial Process The Nature carry litigation at his own undertakes to on the 4.62, Jurisprudence at 533 Edwin W. Patterson, risk, receiving, cost and consideration of successful, part proceeds Reynolds, Broad sought Special Indemnity Schnabel recovered. Fund v. Okl. to be Taft Co., Inc., Reynolds casting Mo.App., S.W.2d 823.” See Fund, Okl., (5th 1979). Special Id. at 209 Ed. Indem. disciplinary proceeding. Champerty qua ethics prone rule we are to view ourselves — regulated by statute, criminal offense —is entirely free from the restraint of that 21 O.S.1991 554.10 It is also an ethics penal § in regulating statute —because 1.8(e).11 violation under Rule Conduct fall- practice of and the conduct of lawyers ing purview punisha- within the of 554 is § court casts itself the status of an misdemeanor; ble as a acts or omissions exclusive law-making constitutional which come within the ambit Rule body14 uncompromisingly absolutist —an infraction.12 disciplinary constitute position may fraught appreciable be with pressed constitutional by the infirmities danger.15 dissent went and unnoticed uncham- pioned both here below.13 We do not B. roving have a commission to invalidate the Section “Judicial 2201’s Notice” prosecutor’s bargains Bar plea based on an Requirement Must Be Invoked infirmity. uninvoked constitutional Absent By Adversary Use Of Process finely targeted challenge by the accused legal practitioner, I would not test here Section 220116 of the Oklahoma Evidence 1.8(e)’s public-poli- or fundamental-law requires “judicial Code17 take us to notice” cy orthodoxy. of law adversary that is invoked process.18 only Judicial Furthermore, notice means prosecut- in the face dispense proof with silence, we ed state and lawyer’s today cannot feder- decide common, constitutional, al extent, any, to what the court is bound statuto- law — ry law.19 broadly champerty prohi- place articulated Judicial notice stands in the bition in in crafting proof 554. While a Bar unnecessary.20 makes evidence § Annot., Validity See in this connection for Pro- acts or omissions which would not offend priety Arrangement By Attorney Pays professional discipline. sweep Which of criminal Client, Expenses Or Advances Of expansive A.L.R.3d interdiction that is more than the (1966). range lawyers’ professional of a freedom must be avoided and the risk conflict between 10. The of 21 terms O.S.1991 are: § 554 accountability criminal and ethical minimized. "Any directly attorney who either or indirect- ly buys buying any or is interested in evidence 2201(A) 16. The terms § of 12 O.S.1991 are: thing bring of debt or in action with intent to "A. guilty Judicial notice shall be taken suit thereon is of a misdemeanor....” law, court of the common constitutions and supra 11. For the see text of Rule note 1. state, public every territory statutes in force in jurisdiction of the United States.” Boettcher, supra 12. In Ass’n v. Oklahoma Bar respondent-lawyer charged note was seq. O.S.1991 et §§ O.S.1981, 5-103(B), violating App. DR counterpart 1.8(e). pre-Code of Rule law, somebody 18. When state invokes or federal Boettcher, case, present like the came to us on Keller, Okl., we must "notice” it. Benham parties’ by stipulated submission facts and agreed discipline. recommendation In both parties disciplinary cases the concede governing judicial 19. For the rule notice of a rule was violated and recommend that laws, foreign country’s reprimand imposed respondent’s see Panama as the Processes v. be disci- Okl., Co., plinary Cities Service sanction. (1990); 335 at § McCormick on Evidence Agreed supra Stipulations, 13. See note 4. (4th Ed.1992). Ass’n, Tweedy supra Bar Oklahoma note 3 20. S. 1 Jones on 2:1 at § Gard, Evidence, at 1054-1055. cognizance "Judicial notice is the of certain judge may jury properly facts take or Although claims this court for itself a consti- proof they already act without because regulate tutionally power to invested the ethics them_ place known to dence, takes the lawyers legislature, of evi- [I]t to the exclusion it thing....” ignore judi- since it stands the same outer 554’s limit and the § Id., gloss placed upon it 2:1 at 30. “The device of cial Court of Crimi- notice prohibition specified Appeals. allows certain facts to be nal Were the established appreciatively permissi- sup- without the into the more extensive than the introduction record of rules, portive under ble conduct allowed yers might the ethics law- evidence." Lilly, G. An Introduction "[Jjudicial accountability to criminal 7 at 10. notice Evidence, the Law of

OQ5 plea principle will not aid this is recommended on the basis of a Respondent That bargain.23 in this no- disciplinary proceeding. Judicial lawof distinguishable judicial from is

tice bargain four- give plea I the a would infirmity an adversary notice than a corners’ examination for not more notice not take process. We do superficial conformity fundamental infirmity the an aggrieved party has not judi- I would withhold public policy. targeted flaw.21 The re- as a reversible approbation from but a narrow cial class proof the quirement dispense that we with agreed dispositions (a) those in which — alter the adver- of domestic law does not severe, (b) ór too is too lenient discipline disciplinary sary character of a bar disposition those where sought the to be ceeding.22 facially fraught with some is effected fa- flaw, (c) tal fundamental-law not seek to Respondent Here the did those the result would otherwise grounds where that discipline clearly on the avoid public policy.24 would contravene the foundation of source of law which is I upset loath ever to either le- proceeding plea bargain by this rais- a —is —Rule sponte sua constitutionally infirm. cannot gally or We fundamen- ing some nonfacial the bene- sponte sua Respondent give this infirmity in a case like which tal-law infirmity that was not an but a mild pressed in imposition for tenders fit of form adversary context. discipline.

C. II Sponte Consideration Of Sua Upon Limits (THIRD) THE RESTATEMENT Proceeding By Concluded Disciplinary A GOVERNING LAWYERS Bargain A Upon The PRT Plea Support for the dissent’s view is found troubling question is how far Another tentative of the Restatement go raising constitutional the court should draft sponte (Third) when, here, Governing Lawyers,25 issues sua which discipline as § There, is, investigation. expressed proof, course of its it re- is a substitute for formal one-year suspension imposed formally obligation that the the view lieves counsel from respondent support was too harsh when com- a noticed fact.... on the introduce evidence [Jjudicial expedites upon pared a device that both visited a law- notice is to a similar sanction by inflicting gross as a method yer trial of a case and serves economic harm his highly improbable judge prevent responsibility can which findings to re- clients. Our constitutional Id., jury. at 13. "The discharged by giving § of fact prosecutions a is view bar ‘judicial applied notice’ often is term meaningful fair de novo review of the rec- judge, usually process by Id., with the assis- correctness. at 506 ommended sanction’s counsel, or discovers the determines C.J., tance of dissenting). (Opala, procedural law in his or some or substantive jurisdiction. Usually a recourse there is other (Third) Governing Lawyers, 25.The Restatement statutes, rules, or cases that are refer- 48, pgs. (April § draft no. tentative need to introduce citation without enced 10, 1991) states: (or original copies) of the into evidence Client-Lawyer Financial Forbidden 48. “§ (Notes, No- Id. Judicial material.” Arrangements Law) tice of at 15. (1) acquire proprietary lawyer A of action or mat- interest in the cause Goodrich, supra at note 5 593. 21. Davis v. B.F. lawyer conducting litigation that the ter of client, may: lawyer except Lobaugh, supra Ass’n 22. State ex rel. Okl Bar (a) Acquire a lien as J., dissenting). (Opala, note 5 at 813 expenses; lawyer’s fee or secure the (b) contingent a client for a Contract with ex rel. Oklahoma See in this connection State prohibited when fee in a civil case Okl., Lacoste, Bar Ass'n v. stated in (2) C.J., dissenting). (Opala, not make pending or connection with loan to a client in Ass’n v. La ex rel. Oklahoma Bar In State lawyer is con- that the coste, respondent-lawyer was supra note client, ducting except that the for the party charged misrepresentations to a third may: making Bar in the statements to the false (a) restricts advances to clients to circum- court either to await the final text of stances in which the client needs financial launching Restatement before an all-out a coerced settlement. assistance to avoid legislative change or drive27 for the Rule’s d 48 notes that while loans Comment to § (b) to have a Bar committee formulate an beyond litigation expenses are to clients interim revision Rule to become “they jurisdictions, in most are forbidden pending adoption effective of the text final financially justified help a when needed of Restatement. pressed proceed suit rather client with a may accepting than whatever settlement be CONCLUSION may

offered. client whose resources depleted by injury giving rise have been an Respondent may deserving While this be difficulty obtaining to a suit have of total of infirmi- exoneration on basis food, clothing, shelter and medical treat- cannot, urged dissent, I ties in the during protracted litigation.” The ment lively controversy, join today of a absence same comment adds banks and other sponte sua any consideration constitu- lending usually institutions “will be unwill- withholding my impri- tional issue nor ing security to lend on the of a lawsuit matur PRT-approved plea from the bar- assessing probable the claim’s because gain. facially There are here no fatal and champerty is often difficult and worth apparent public-policy or fundamental-law may prohibit acquiring an interest in the light exempli- defects. In of recent trends security.” cause of action as The text of (Third), by I the cited comment concludes that on bal- fied 48 of Restatement ance, permit- “it is for the loan to be strongly better would favor re-examination of ted than for the client to be saved from relaxing Rule with a view to its conflicts of interest but forced need to scope. My restrictive counsel to the court abandon the suit.”26 is not so much against abuse of process but more so misuse our against would, I urges, dissent favor legislative authority. appeal I make 1.8(e) in light reexamination Rule orderly change is in the course of quoted draft of tentative Restatement (Third). today, charting permissible lawyers’ But would counsel the bounds of (a) covering bility, Foundation, Lawyers Advance or a loan Roscoe Pound-American Trial expenses litigation, Lawyer’s court costs and the re- The American Code of Conduct, payment lawyer may 5.6(a) (1980) (allowing of which to the be con- Rule advances matter; tingent fair).” on the outcome of the on terms that are The § client terms, (b) guaranty Make or a loan on fair on restriction advances to clients "derives from repayment to the be Conduct, the contingent Rules of Minnesota Professional Rule matter, the outcome of the on 1.8(e)(3); Edwins, Louisiana State Bar Assoc. v. the loan is needed to the client to enable (La.1976)." 329 So.2d 437 The Note further delay in that otherwise withstand jurisdictions observes that ... bar all ”[m]ost might unjustly induce the client to settle or Carroll, living expenses. E.g., loans of In re hardship because of financial dismiss case (1979); Ariz. 602 P.2d 461 1 G. Hazard & W. ” * * * (Empha- rather than on the merits. Hodes, (2d Lawyering The Law of ed. added.) sis 1990).” Id. at 230-231. d) (comment Reporter’s 26. The Note to 48§ responsibility legislation, prosecution 27. The authority lawyers observes that allows “[s]ome adjudication legal in the entire arena of living expenses to advance to their clients so practitioners’ professional discipline is constitu- promised long as that is not done or before the tionally reposed judicial department. E.g., retained. Ala. Rules of Prof. governed by The Bar’s conduct is rules which Conduct, 1.8; Rule California Rules of Profes- promulgated this court in the exercise of Conduct, 4-210(A)(2) (lawyer may Rule sional legislative regulator. its function as the Bar’s Conduct, client); lend to N.D. Rules of Prof. making distinguished to be This law function is 1.8(e) (lawyer may guarantee loan to separate McCallum, from that which attends an exer- client); People v. 341 Ill. jurisdiction Sizer, (1930); cise of our as the sole and final N.E. 827 In re 306 Mo. practitioner’s (1924); arbiter of the status for audience Ry., Johnson v. Great Northern S.W. 922 capacity the latter before Oklahoma courts. also 128 Minn. 151 N.W. 125 See legislator qua Responsibility, this court acts not as a but rather DR Texas Code of Professional Ass’n, adjudicator. Tweedy (omitting prohibitions v. Oklahoma Bar of advances to all client); Responsi- supra note 3 at 1052-1055. Commission on Professional receipt Appeals. Upon our the Texas Court of done mea- It should be conduct. mandate, response this Court issued an order legislative and restrained sured Bench, directing Respondent why to show cause with the full consultation after discipline order not made. final should as with the academic practising Bar as well Respondent respond. has failed to From community. legal

an examination of the matters set forth Judgment Indictment and Sen- tence, felony Securing conviction by Deception, Execution of a Document Respondent’s demonstrates unfitness Oklahoma, rel., ex OKLA- STATE practice law. ASSOCIATION, BAR HOMA RESPONDENT, RONALD GENE FISH- Complainant, ER, HEREBY IS DISBARRED. All the Justices concur. FISHER, Respondent. Ronald Gene 3663. No. SCBD

No. OBAD

Supreme Court of Oklahoma.

July STATE of Oklahoma ex rel. OKLA- ASSOCIATION, BAR

HOMA Complainant, KOURI, Dwight Respondent. C. No. 3734. SCBD Supreme Court of Oklahoma. Sept. OPINION

MEMORANDUM

SIMMS, Judge: Fisher, Ronald Gene was

Respondent, of Texas of the felo-

convicted the State Securing Execution of a Document

ny of felony, and Deception, degree a third years probation with a to ten

sentenced $5,000.00. February On

fine of suspended Respondent from the

this Court 7.3, pursuant to Rule Rules

practice of law Disciplinary Proceedings, 5 O.S.

Governing Respondent appeal- App. 1-A. affirmed, conviction, and it was

ed the copy the mandate from

evidenced

Case Details

Case Name: State Ex Rel. Oklahoma Bar Ass'n v. Smolen

Court Name: Supreme Court of Oklahoma

Date Published: Jul 14, 1992

Citation: 837 P.2d 894

Docket Number: OBAD No. 1029. SCBD No. 3778

Court Abbreviation: Okla.