SHELLER v. THE SUPERIOR COURT

Filed 1/17/08

CERTIFIED FOR PUBLICATION

IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

SECOND APPELLATE DISTRICT

DIVISION THREE

Story continued from Part I .

Farmers also contends that the order formally reprimanding Attorney Sheller is not an appealable order. Indeed, it appears that the order is not. (See Code Civ. Proc.,  904.1.) We exercise our discretion, however, to treat the notice of appeal as a petition for writ of mandate, and address the issue.

2. Inherent Power of the Trial Courts

In order to properly discuss the issues raised by this appeal, we must first address the inherent powers of a trial court. All courts possess inherent supervisory or administrative powers to enable them to carry out their duties. (Bauguess v. Paine (1978) 22 Cal.3d 626, 635-636.) Code of Civil Procedure section 128 reflects these powers, but is not their source. That section provides, in pertinent part, that each court has the power [t]o control in furtherance of justice, the conduct of its ministerial officers, and of all other persons in any manner connected with a judicial proceeding before it, in every matter pertaining thereto. (Code Civ. Proc., 128, subd. (a)(5).)

Prior to the enactment of the State Bar Act, attorney discipline was administered by the courts under their inherent judicial power. (1 Witkin, Cal. Procedure (4th ed. 1996) Attorneys,  616, p. 727.) As originally enacted, the State Bar Act did not attempt to curtail or limit the previously existing judicial power to impose discipline. (See Bus. & Prof. Code, fmr.  6087 [nothing in the State Bar Act shall be construed as limiting or altering the powers of the courts of this state to disbar or discipline members of the bar].) However, in 1951, the State Bar Act was amended to exclude superior courts and appellate courts from exercising such jurisdiction, leaving the Supreme Court as the sole judicial entity with jurisdiction over attorney discipline. (Bus. & Prof. Code,  6087, 6100; Jacobs v. State Bar (1977) 20 Cal.3d 191, 196.) Thus, in California, the inherent judicial power of the superior court does not extend to attorney disciplinary actions. That power is exclusively held by the Supreme Court and the State Bar, acting as its administrative arm. (Jacobs v. State Bar, supra, 20 Cal.3d at p. 198.)

Trial courts in California are not, however, powerless to sanction attorneys for improper conduct or to control the proceedings before them to prevent injustice. Thus, trial courts may conduct contempt proceedings, dismiss sham actions, admonish counsel in open court, strike sham pleadings, and report misconduct to the State Bar. (1 Witkin, Cal. Procedure (4th ed. 1996) Attorneys,  620, p. 731.) In an appropriate case, the trial court may exercise its inherent power to control the conduct of its ministerial officers to disqualify an attorney in an action before it. (In re Complex Asbestos Litigation (1991) 232 Cal.App.3d 572, 585.) Issues of disqualification often arise when an attorney has a conflict of interest, such as when the attorney has been exposed to confidential information of a former client who is in an adverse position in current litigation. (Id. at pp. 586‑587; Roush v. Seagate Technology, LLC (2007) 150 Cal.App.4th 210, 219.)  A motion to disqualify counsel brings the clients right to the attorney of his or her choice into conflict with the need to maintain ethical standards of professional responsibility.  (Knight v. Ferguson (2007) 149 Cal.App.4th 1207, 1212.) Disqualification motions implicate several important interests, among them are the clients right to counsel of their choice, the attorneys interest in representing a client, the financial burden of replacing a disqualified attorney, and tactical abuse that may underlie the motion. [Citation.] The paramount concern in determining whether counsel should be disqualified is the preservation of public trust in the scrupulous administration of justice and the integrity of the bar. [Citations.] It must be remembered, however, that disqualification is a drastic course of action that should not be taken simply out of hypersensitivity to ethical nuances or the appearance of impropriety. (Roush v. Seagate Technology, LLC, supra, 150 Cal.App.4th at pp. 218‑219.) The purpose of disqualification is not to punish a transgression of professional ethics. [Citation.] Disqualification is only justified where the misconduct will have a continuing effect on judicial proceedings. (Baugh v. Garl (2006) 137 Cal.App.4th 737, 744.)

The question has arisen as to whether the inherent power of a trial court includes the power to sanction attorneys for bad faith conduct by requiring the payment of attorneys fees. The United States Supreme Court has held that the inherent power of federal district courts encompasses this power. (Chambers v. NASCO, Inc. (1991) 501 U.S. 32, 44‑45.) In Chambers, the United States Supreme Court began with the premise that a federal court has the inherent power to control admission to its bar and to discipline attorneys who appear before it. (Id. at p. 43.) A courts inherent powers must be exercised with restraint and discretion, and [a] primary aspect of that discretion is the ability to fashion an appropriate sanction for conduct which abuses the judicial process. (Id. at pp. 44‑45.) The Supreme Court reasoned that, since a district court contains the inherent power to dismiss an action within its discretion, the lesser sanction of the imposition of attorneys fees is also within its inherent power. (Id. at p. 45.)

The California Supreme Court has reached the opposite result. (Bauguess v. Paine, supra, 22 Cal.3d at p. 637.) The California Supreme Court concluded that [i]t would be both unnecessary and unwise to permit trial courts to use fee awards as sanctions apart from those situations authorized by statute. (Ibid.) The California Supreme Court acknowledged that a trial court has the power of contempt to sanction disruptive or disrespectful attorneys, and that procedural safeguards have been enacted to govern contempt proceedings. Without such procedural safeguards in place, serious due process problems would result were trial courts to use their inherent power, in lieu of the contempt power, to punish misconduct by awarding attorneys fees to an opposing party or counsel. (Id. at p. 638.) Concluding that the use of the courts inherent power to punish misconduct by awarding attorneys fees may imperil the independence of the bar and thereby undermine the adversary system, the California Supreme Court concluded that the power to impose such sanctions must be created by the Legislature with appropriate safeguards.^[1] (Id. at pp. 638‑639.) The reasoning of Bauguess has been extended to any sanction occasioned by attorney conduct. (Yarnell & Associates v. Superior Court (1980) 106 Cal.App.3d 918, 923 [concerned with monetary sanctions].)

3. Admission Pro Hac Vice

Most, if not all, States allow an out-of-state attorney to appear pro hac vice.^[2] (Leis v. Flynt, supra, 439 U.S. at pp. 441‑442.) However, it is not a right granted by the Constitution. (Id. at p. 442.)

California Rules of Court, rule 9.40 governs the admission of attorneys pro hac vice in California. An attorney who is a member in good standing of the bar of another state who has been retained to appear in a particular cause pending before a court of this state may, in the discretion of such court be permitted to appear as counsel pro hac vice. (Cal. Rules of Court, rule 9.40(a).) No person is eligible to appear pro hac vice if the person is a California resident, regularly employed in California, or regularly engaged in substantial business in California. (Ibid.) Repeated appearances pro hac vice constitute cause to deny an application. (Cal. Rules of Court, rule 9.40(b).) An attorney seeking to appear pro hac vice must file an application indicating the courts to which the applicant has been admitted, and that the applicant is a member in good standing in those courts. An applicant must indicate that he or she is not currently suspended or disbarred in any court, but there is no requirement for including any history of discipline imposed.^[3] (Cal. Rules of Court, rule 9.40(d).)

While there does not appear to be a statement of the scope of a courts discretion in ruling on an application to appear pro hac vice in a civil case, our Supreme Court has concluded that, when a criminal defendant seeks to be represented by an attorney appearing pro hac vice, the courts exercise of discretion should be limited by the individuals right to defend himself in whatever manner he desires. (Magee v. Superior Court (1973) 8 Cal.3d 949, 952.) The defendants choice of counsel should be interfered with only to avoid significant prejudice to the defendant himself or  a disruption of the orderly processes of justice unreasonable under the circumstances of the particular case.  (Ibid.)

While in some jurisdictions, the State Bar has no power to discipline attorneys appearing pro hac vice (e.g., State Industries, Inc. v. Jernigan (Fla. App. 2000) 751 So.2d 680, 682), an attorney appearing pro hac vice in California is subject to the disciplinary jurisdiction of the State Bar with respect to any of his or her acts occurring in the course of such appearance. (Cal. Rules of Court, rule 9.40(f); see also Birbrower, Montalbano, Condon & Frank v. Superior Court (1998) 17 Cal.4th 119, 130; Cal. Rules of Prof. Conduct, rule 1-100(D)(2).) Additionally, once permitted to appear pro hac vice, a foreign attorney in California is subject to the jurisdiction of the courts of this state with respect to the law of this state governing the conduct of attorneys to the same extent as a member of the State Bar of California.^[4] (Cal. Rules of Court, rule 9.40(f).)

4. Revocation of Pro Hac Vice Status

No case in California has yet addressed whether a trial court has the authority to revoke an attorneys pro hac vice status. Numerous other courts, however, have considered the issue, and determined that trial courts possess that authority. (See Attorneys: Revocation of State Court Pro Hac Vice Admission, 64 A.L.R.4th 1217.) The parties have not cited to, and independent research has not disclosed, an opinion from any jurisdiction concluding that trial courts lacked the authority to revoke an attorneys pro hac vice status.

However, the legal basis for the authority to revoke an attorneys pro hac vice status has varied. Some jurisdictions expressly include the authority to revoke pro hac vice status in their statutes or rules allowing pro hac vice appearances. (See Del. Super. Ct. Rules of Civ. Proc., rule 90.1 [The court may revoke a pro hac vice admission sua sponte or upon the motion of a party, if it determines, after a hearing or other meaningful opportunity to respond, the continued admission pro hac vice to be inappropriate or inadvisable]; N.C. Gen. Stat.  84‑4.2 [Permission granted (to appear pro hac vice) may be summarily revoked by the General Court of Justice or any agency . . . on its own motion and in its discretion]; Wis. Supr. Ct. Rules, rule 10.03(4) [Permission to the nonresident lawyer (to appear pro hac vice) may be withdrawn by the judge granting it if the lawyer by his or her conduct manifests incompetency to represent a client in a Wisconsin court or by his or her unwillingness to abide by the rules of professional conduct for attorneys and the rules of decorum of the court].) Federal courts have concluded the authority to revoke an attorneys pro hac vice status is included within the inherent power of a federal court to control admission to its bar and to discipline attorneys who appear before it. (Lasar v. Ford Motor Company (9th Cir. 2005) 399 F.3d 1101, 1118; In re Complaint of PMD Enterprises Inc. (D.N.J. 2002) 215 F.Supp.2d 519, 530.) Finally, some courts have found the power to revoke an attorneys pro hac vice status within a trial courts inherent power to regulate practice before it and protect the integrity of its proceedings. (See, e.g., Walls v. City of Toledo (Ohio App. 2006) 850 N.E.2d 789, 792; Bank of Hawaii v. Kunimoto (Haw. 1999) 984 P.2d 1198, 1213.)

Moreover, jurisdictions differ on the conduct of the pro hac vice attorney that will be sufficient to justify revocation of pro hac vice status. In some jurisdictions, the trial court may revoke an out-of-state attorneys pro hac vice status for any conduct which adversely impacts the administration of justice. (E.g., State Industries, Inc. v. Jernigan, supra, 751 So.2d at p. 682 [this is a broad standard that would permit revocation of pro hac vice status for conduct that would be permissible by a local attorney]; Williams & Connolly, LLP v. People for the Ethical Treatment of Animals, Inc. (Va. 2007) 643 S.E.2d 136, 148 [conduct justifying sanctions under statute is a sufficient basis to revoke pro hac vice status under this standard].) In some jurisdictions, violation of an established disciplinary standard justifies revocation of pro hac vice status. (E.g., In re Complaint of PMD Enterprises Inc., supra, 215 F.Supp.2d at p. 531.) Other jurisdictions require bad faith of the pro hac vice attorney before such status can be revoked. (Baldwin Hardware Corp. v. Franksu Enterprise Corp. (Fed. Cir. 1996) 78 F.3d 550, 562 [trial courts order prohibited counsel from appearing pro hac vice before it in the future].) Still other jurisdictions grant trial courts a very broad discretion, which permits revocation of pro hac vice status for reasons which do not amount to misconduct. (E.g., Brown v. Wood (Ark. 1974) 516 S.W.2d 98, 99-101 [not an abuse of discretion to revoke an attorneys pro hac vice status for concerns that the pro hac vice attorneys extensive practice would adversely affect the trial courts ability to move its docket along].) In Ohio, the courts have not yet determined the outer limits of the trial courts authority to revoke pro hac vice status, but have concluded that, at the least, conduct which would support disqualification of a local attorney is sufficient to justify revocation of a pro hac vice attorneys status. (Royal Indemnity Co. v. J.C. Penney Co. (Ohio 1986) 501 N.E.2d 617, 622.) In Washington, pro hac vice status can be revoked for conduct that constitutes contempt, adversely affects the conduct of the litigation, or violates the code of professional responsibility.^[5] (Hallmann v. Sturm Ruger & Co., supra, 639 P.2d at p. 808.)

In this admittedly non-uniform state of the law, we now consider whether California trial courts have the authority to revoke an attorneys pro hac vice status. We consider the three legal bases that have been found by other jurisdictions to support such authority: (1) express provision in statute or rule; (2) implied in courts authority to control admission to its bar and discipline attorneys who appear before it; and (3) implied in courts inherent power to regulate practice before it and protect the integrity of its proceedings. California has no express provision granting trial courts the right to revoke an attorneys pro hac vice status. Unlike federal courts, California trial courts do not possess the power to control admission to the bar and discipline attorneys. But California trial courts do possess the inherent power to regulate practice before them and protect the integrity of their proceedings. In determining whether this power encompasses the authority to revoke an attorneys pro hac vice status, we look at the language of the governing court rule. An attorney appearing pro hac vice is subject to the jurisdiction of the courts of this state with respect to the law of this state governing the conduct of attorneys to the same extent as a member of the State Bar of California. (Cal. Rules of Court, rule 9.40(f).) Given that a California trial courts inherent power includes the authority to disqualify a California attorney, and that revocation of an out‑of-state attorneys pro hac vice status is, in effect, a disqualification of the out‑of‑state attorney,^[6]we conclude that a California trial courts inherent powers include the authority to revoke an attorneys pro hac vice status when that attorney has engaged in conduct that would be sufficient to disqualify a California attorney. While it may be that a California trial court has the authority to revoke an attorneys pro hac vice status under other circumstances as well, we need not reach the issue of the precise limits of a trial courts authority in this appeal.

5. The Trial Courts Order

In this case, the trial court ordered Attorney Sheller to pay Farmerss attorneys fees. The order had no statutory basis, and the trial court could not have imposed a similar order on a California attorney. Similarly, the trial court formally reprimanded Attorney Sheller. Again, this is not a sanction that the trial court would have had jurisdiction to impose on a California attorney. Farmers suggests that, even though these sanctions could not have been imposed on a California attorney, the sanctions can be upheld in this case as lesser sanctions to the permissible sanction of revocation of Attorney Shellers pro hac vice status. The conclusion does not follow. Indeed, it has already been established that although a trial court has the inherent power to disqualify a California attorney, it does not have the power to impose the apparently lesser sanctions of attorneys fees and a formal reprimand. There is simply no reason to conclude that, even though a trial court has the inherent power to revoke an out‑of‑state attorneys pro hac vice status, it somehow has the power to impose every conceivably lesser sanction on that attorney especially when the trial court does not possess the jurisdiction to impose those sanctions on a California attorney. An attorney appearing pro hac vice submits to the jurisdiction of the courts of this state with respect to the law of this state governing the conduct of attorneys to the same extent as a member of the State Bar of California. (Cal. Rules of Court, rule 9.40(f).) The attorney appearing pro hac vice does not submit to the disciplinary jurisdiction of the California courts to a greater extent than California attorneys. The trial courts order was error.

However, on remand, the court can also consider whether Attorney Shellers pro hac vice status should be revoked. Moreover, the trial court can consider imposition of any other sanction procedurally available and justified by the facts. Specifically, but not exclusively, the court can consider whether Attorney Sheller should be reported to the State Bar for the initiation of disciplinary proceedings. (Cf. In the Matter of Fletcher (Ind. 1998) 694 N.E.2d 1143 [Indiana Supreme Court disciplines an Illinois attorney for misconduct when appearing pro hac vice; attorney is prohibited from appearing pro hac vice in Indiana for a term of two years].)

On appeal, Attorney Sheller argues that, at most, he committed a marginal infraction, rendering the imposition of any sanctions an abuse of discretion. Here, we disagree. While we conclude that the trial court lacked jurisdiction to impose the sanctions ordered, this should in no way be interpreted as our approval of Attorney Shellers conduct in this matter. Attorney Sheller mailed an advertising flyer to 350 of Farmerss policyholders, seeking additional class representatives and informing them, If accepted, you are paid for your time in an amount set by the judge. This statement is completely false; it indicates to the policyholders that they would be paid for [their] time, in other words, that they would be paid regardless of the outcome of the action. We also share the trial courts concern that Attorney Shellers explanations for his conduct were contradictory and his purported justifications were wholly inadequate. While Attorney Shellers status as a pro hac vice attorney does not permit the trial court to sanction him in a manner that a California attorney could not be sanctioned, we express no opinion as to whether Attorney Shellers conduct is worthy of the sanction of revocation of his pro hac vice status or any other permissible sanction.

DISPOSITION

The order requiring Attorney Sheller to pay Farmerss attorneys fees is reversed. The petition for writ of mandate with respect to the order reprimanding Attorney Sheller is granted, and the trial court is directed to vacate the order. The case is remanded for further proceedings consistent with the views expressed in this opinion. The parties are to bear their own costs on appeal.

CERTIFIED FOR PUBLICATION

CROSKEY, Acting P. J.

We Concur:

KITCHING, J.

ALDRICH, J.

Publication Courtesy of California attorney referral.

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^[1] The Legislature responded to Bauguess by enacting statutory provisions for a trial court to impose the sanction of attorneys fees under certain circumstances. (Code Civ. Proc.,  128.5, 128.7; see Olmstead v. Arthur J. Gallagher & Co. (2004) 32 Cal.4th 804, 809.) These statutes were not relied upon by the trial court in this case.

^[2] Relying on sections of the Business and Professions Code governing the admission of foreign attorneys to the California bar (Bus. & Prof. 6062, 6068), the U.S. Supreme Court suggested that California was an example of a jurisdiction that has chosen to bar all pro hac vice appearances. (Leis v. Flynt (1979) 439 U.S. 438, 444.) California has, in fact, allowed pro hac vice applications, originally by common law (In re McCue (1930) 211 Cal. 57, 67), and eventually, by Court Rule. (Cal. Rules of Court, rule 9.40, formerly Rule 983, adopted 1972.)

^[3] This division has previously indicated that an applicants prior conduct is irrelevant to a trial courts ruling on application to appear pro hac vice. (Walter E. Heller Western, Inc. v. Superior Court (1980) 111 Cal.App.3d 706, 709 & fn. 4.) As we are concerned with counsels conduct after being granted permission to appear pro hac vice, we need not address the continuing validity of that holding today.

^[4] California similarly subjects to the disciplinary jurisdiction of its courts and State Bar: military counsel permitted to appear (Cal. Rules of Court, rule 9.41(c)); registered foreign legal consultants (Cal. Rules of Court, rule 9.44(c)(6)-(c)(8)); and out-of-state attorney arbitration counsel (Code Civ. Proc. 1282.4, subd. (c)(9); Cal. Rules of Court, rule 9.43(d).)

^[5] The Washington Supreme Court concluded that, when considering an application for pro hac vice status, trial courts inquiries into the ethical conduct of the applicant should be limited to matters which would warrant disqualification, were the attorney a member of the local bar, or which would justify discipline under the courts contempt powers. (Hahn v. Boeing Co. (Wash. 1980) 621 P.2d 1263, 1267.) The Washington Supreme Court concluded that an inquiry into whether the plaintiffs attorney had violated state disciplinary rules regarding solicitation of clients had no place in determining whether the attorney should be admitted pro hac vice, as those rules had no relevance to the future conduct of the trial nor did their violation prejudice the defendant. (Id. at pp. 1267-1268.) Two years later, the Washington appellate court concluded that the same interests that are balanced in determining whether to grant or deny an application for pro hac vice status are to be considered in determining whether to revoke pro hac vice status. (Hallmann v. Sturm Ruger & Co. (Wash. App. 1982) 639 P.2d 805, 807.) Nonetheless, the court determined that, in addition to the bases for denial of pro hac vice application set forth in Hahn, pro hac vice status could also be revoked for a violation of the states disciplinary code. (Id. at p. 808.)

^[6]Hahn v. Boeing Co., supra, at p. 1267 stated that [d]enial of permission to appear pro hac vice is in effect a disqualification of the attorney.