In re Arrotta

• Decision Date: 25 August 2004
• Docket Number: No. SB-04-0015-R.,SB-04-0015-R.
• Citation: 96 P.3d 213,208 Ariz. 509
• Parties: In the Matter of a Disbarred Member of the State Bar of Arizona, Richard B. ARROTTA, Attorney No. 003992, Applicant.
• Court: Arizona Supreme Court

96 P.3d 213

208 Ariz. 509

In the Matter of a Disbarred Member of the State Bar of Arizona, Richard B. ARROTTA, Attorney No. 003992, Applicant.

No. SB-04-0015-R.

Supreme Court of Arizona, En Banc.

August 25, 2004.

Thomas A. Zlaket, Tucson, Attorney for Richard B. Arrotta.

State Bar of Arizona by Robert B. Van Wyck, Chief Bar Counsel and Denise M. Quinterri, Staff Bar Counsel, Phoenix, Attorneys for State Bar of Arizona.

OPINION

McGREGOR, Vice Chief Justice.

¶ 1 The issue in this case is whether Richard B. Arrotta, who was disbarred in 1995, has established that he should be readmitted to the Arizona State Bar. We conclude that he has not established that he has been rehabilitated and deny his application for reinstatement. We review this matter pursuant to Arizona Rule of the Supreme Court 65(b)(5).

I.

¶ 2 Arrotta was admitted to practice in Arizona in 1974. Over the next twenty years, he worked for the United States Army as a Judge Advocate General, for the Pima County Attorney's Office as a deputy county attorney, and as a sole practitioner in private practice.

¶ 3 In 1990, Arrotta began representing clients in claims under the National Childhood Vaccine Act, 42 U.S.C. 300aa-1 to 300aa-34 (1986) (Vaccine Act). The Vaccine Act established an administrative procedure for compensating children injured as a result of a required vaccination and provided reimbursement to attorneys for reasonable fees and costs incurred in representing a victim. See 42 U.S.C. § 300aa-15. The statute, however, expressly barred attorneys in Vaccine Act cases from charging clients any additional fees for services rendered. 42 U.S.C. § 300aa-15(e)(3).

¶ 4 The Valenzuelas, whose child had died as the result of a vaccination, retained Arrotta to bring an action under the Vaccine Act. Although Arrotta received approximately $39,000.00 in fees from the government for representing the Valenzuelas, he also withheld a one-third contingency fee from the family. In January 1993, when the State Bar inquired about Arrotta's fee practice in Vaccine Act cases, Arrotta falsely stated that he had never charged a contingency fee, or any other fee, to any of his thirty-five Vaccine Act clients.

¶ 5 Also in 1993, unrelated to his misconduct involving the Vaccine Act cases, Arrotta met Philip N. DePalma, a claims adjuster in Arizona's risk management section. DePalma asked Arrotta to represent his brother in a case involving his brother's termination from his job. Arrotta agreed. Shortly thereafter, DePalma asked Arrotta if he would represent a claimant whom DePalma believed had a significant medical malpractice claim against the state. Arrotta consented, and DePalma subsequently informed Arrotta of other claimants and facilitated Arrotta's solicitation of those cases. While DePalma initially made no mention of payments due him, months later DePalma asked Arrotta to give him referral fees for the cases he had sent to Arrotta. Arrotta agreed and proceeded to make secret payments, which eventually exceeded $400,000.00, to DePalma as DePalma continued to provide him confidential information concerning claims against the State of Arizona. This information revealed the identities of persons with potential liability claims against the state, as well as confidential information related to the claims. Relying on this information, Arrotta solicited potential claimants as clients and ultimately received legal fees in excess of $1.1 million for those cases. At no time did Arrotta or DePalma disclose these payments to the state. Arrotta has always maintained that all of the cases were meritorious and involved clear and provable negligence by the state.

¶ 6 When a federal investigation into these matters began, Arrotta almost immediately gave a full confession to the Assistant United States Attorney, without seeking any concessions in return. Shortly thereafter, in September 1995, Arrotta pled guilty in the United States District Court for the District of Arizona to two counts of mail fraud in violation of 18 U.S.C. § 1341, Class D felonies. Arrotta also pled guilty to bribery, a Class 4 felony, fraudulent schemes and practices, a Class 5 felony, and disclosure of confidential information, a Class 6 felony, in the Superior Court of Arizona for Maricopa County. After entering his guilty pleas, Arrotta consented to disbarment on September 21, 1995.

¶ 7 As a result of his criminal convictions, Arrotta served one year in a federal prison. Since his release from prison, Arrotta has worked as a paralegal/legal assistant for several attorneys in Tucson and Phoenix and currently works full-time as a legal assistant for the Hollingsworth Law Firm, P.C. in Tucson. Although Arizona Rule of the Supreme Court 64(b) permits a disbarred lawyer to apply for reinstatement after five years,¹ Arrotta waited almost eight years to submit his application.

¶ 8 In his application, Arrotta presented dozens of letters in support of his reinstatement from lawyers, employers, family members, judges, clergy, and members of his church. In addition, during his reinstatement hearing, Arrotta offered testimony from the attorney responsible for prosecuting him in federal court, the former pastor of his church, a lawyer and former employer, and Arrotta's current employer, Louis Hollingsworth. Arrotta also testified.

¶ 9 At the outset of the hearing, the State Bar indicated that it would reserve its opinion as to whether Arrotta should be reinstated until the close of evidence. At the close of the hearing, the State Bar recommended reinstatement. Based on the evidence presented and the position of the State Bar, the Hearing Officer found that Arrotta has been rehabilitated and recommended that Arrotta be reinstated to the practice of law in Arizona; that he be placed on probation for one year, subject to various terms; and that he pay the costs and expenses incurred in connection with his application for reinstatement. Pursuant to Arizona Rule of the Supreme Court 65, the Disciplinary Commission reviewed the Hearing Officer's Report² and accepted the Hearing Officer's recommendation of reinstatement, one year of probation, and costs of the proceedings.

¶ 10 Two members of the Disciplinary Commission dissented, finding Arrotta unworthy of reinstatement. The dissent took particular note of the fact that, during oral argument, Arrotta's counsel opined that an individual applying for initial admission to the Arizona State Bar probably would not be admitted with a criminal record similar to that of Arrotta. The dissent found it troubling that "the bar apparently is set lower for readmission than for initial admission.... [I]t would seem that the bar for readmission should be if anything higher." Moreover, because Arrotta made no reference in his application to any kind of "rehabilitation, counseling, therapy or any other modality to try to understand why he would commit such dishonest acts," the dissent concluded that Arrotta had not shown rehabilitation.

II.

¶ 11 Arizona Rules of the Supreme Court 64 and 65 impose two basic requirements upon a disbarred lawyer who seeks reinstatement. First, like initial applicants for admission, the disbarred applicant must establish that he "possesses the moral qualifications and knowledge of the law required for admission to practice law in this state." Ariz. R. Sup.Ct. 64(a). But the disbarred applicant must do more; he must additionally demonstrate "rehabilitation." Ariz. R. Sup.Ct. 64(e). The reason for requiring more of an applicant for reinstatement than of an applicant seeking his initial admission to the bar should be evident: Knowing that we do not lightly disbar lawyers, we also know that the disbarred lawyer has already seriously violated the trust placed in him as an officer of the court and has revealed that, at least in some circumstances, he poses a threat to members of the public. We must "`endeavor to make certain that [we do] not again put into the hands of an unworthy petitioner that almost unlimited opportunity to inflict wrongs upon society possessed by a practicing lawyer.'" In re Pier, 561 N.W.2d 297, 300 (S.D.1997) (quoting In re Morrison, 45 S.D. 123, 186 N.W. 556, 557 (1922)).

¶ 12 The burden of establishing rehabilitation falls on the applicant: "The lawyer requesting reinstatement shall have the burden of demonstrating by clear and convincing evidence the lawyer's rehabilitation, compliance with all applicable discipline orders and rules, fitness to practice, and competence." Ariz. R. Sup.Ct. 65(b)(2). Moreover, the more serious the misconduct that led to disbarment, the more difficult is the applicant's task in showing rehabilitation. In re Robbins, 172 Ariz. 255, 256, 836 P.2d 965, 966 (1992). On the other hand, the severity of a lawyer's misconduct in itself does not preclude reinstatement if the lawyer can establish that he has rehabilitated himself. In re Peterson, 108 Ariz. 255, 256-57, 495 P.2d 851, 852-53 (1972) ("Disbarment is not imposed as punishment, but rather to protect the public and the other members of the bar, and to deter other lawyers from the temptation to violate their ethics."). Nevertheless, "neither the fact that Applicant has been sufficiently sanctioned, nor the mere passage of time, is enough to warrant reinstatement. Applicant's burden is to show, by clear and convincing evidence, that he has been rehabilitated, that he is competent, and that he poses no further threat to members of the public." Robbins, 172 Ariz. at 256, 836 P.2d at 966. As we balance these factors, our primary responsibility remains at all times the protection of the public.

¶ 13 In evaluating an application for reinstatement, we consider four factors: "`the applicant's character and standing prior to the disbarment, the nature and character of the charge for which he was disbarred, his conduct subsequent to the disbarment, and the time that has elapsed between the disbarment and the application for reinstatement.'" Id. ...