In re Laudumiey, 2003-B-0234.

• Decision Date: 27 June 2003
• Docket Number: No. 2003-B-0234.,2003-B-0234.
• Citation: 849 So.2d 515
• Court: Louisiana Supreme Court
• Parties: In re Fernand L. LAUDUMIEY, III and Dennis S. Mann.

849 So.2d 515

In re Fernand L. LAUDUMIEY, III and Dennis S. Mann.

No. 2003-B-0234.

Supreme Court of Louisiana.

June 27, 2003.

Charles B. Plattsmier, Baton Rouge, for Applicant.

Fernand L. Laudumiey, II, William A. Porteous, III, New Orleans, Dennis S. Mann, for Respondent.

ATTORNEY DISCIPLINARY PROCEEDINGS.

PER CURIAM.

This disciplinary matter involves consolidated charges instituted against respondents, Fernand L. Laudumiey, III and Dennis S. Mann, two attorneys who are licensed to practice law in Louisiana, but currently on interim suspension.

UNDERLYING FACTS

Factual Background

In 1996, respondents entered into an employment arrangement with Ernest Aiavolasiti and Michael Palmisano, two nonattorney "legal assistants" who had been previously employed by another law firm.¹ Mr. Aiavolasiti and Mr. Palmisano indicated they had personal contact with their former firm's clients and felt that many of the clients would follow them after their departure from the firm.

At the suggestion of Mr. Aiavolasiti and Mr. Palmisano, respondents set up a law office on Canal Street in the City of New Orleans.² Respondents gave Mr. Aiavolasiti and Mr. Palmisano full responsibility and unfettered discretion to set up the office, and to handle all administrative matters and case acquisitions, development, and settlements.

In the first year, respondents put up approximately $270,000 of their own funds to finance the firm's operating account. Mr. Aiavolasiti and Mr. Palmisano had complete access to these funds. When the funds were exhausted after the first six months of the new firm's existence, respondents set up a $150,000 line of credit with a bank to finance the operation. Respondents did not monitor how the funds were being spent. It later turned out these funds were being used by Mr. Aiavolasiti and Mr. Palmisano, with respondents' knowledge, to pay "runners," persons who were used to solicit personal injury clients for the firm.

During the same time, Mr. Aiavolasiti and Mr. Palmisano provided a quick "transition" of approximately 800 to 1,000 client files from their prior employer to respondents' firm. These clients never met respondents, and communicated exclusively with Mr. Aiavolasiti and Mr. Palmisano.

Eighteen months after its opening, respondents closed the Canal Street office based on concerns that the firm was not generating sufficient revenues. Respondents also began to experience trepidation about their arrangement with Mr. Aiavolassiti and Mr. Palmisano, as an insurance company had begun to question clients during depositions about how they came to be represented by respondents. After the Canal Street office closed, respondents had no further contact with Mr. Aiavolasiti and Mr. Palmisano.

Federal Investigation

Unbeknownst to respondents, Mr. Aiavolasiti and Mr. Palmisano began cooperating with federal authorities who were investigating the practice of runner-based solicitation. In connection with this investigation, Mr. Aiavolasiti and Mr. Palmisano agreed to meet with respondents while wearing hidden recording devices.³ Mr. Aiavolasiti and Mr. Palmisano advised respondents that they had been subpoenaed to appear before a federal grand jury in connection with an FBI investigation. Respondents attempted to persuade Mr. Aiavolasiti and Mr. Palmisano to testify that respondents did not know Mr. Aiavolasiti and Mr. Palmisano were paying runners.⁴ After the meeting, respondents gave Mr. Aiavolasiti and Mr. Palmisano $2,000 in cash to retain counsel and advised more funds were available.

Federal Criminal Proceedings

As a result of the information developed in the federal investigation, respondents were indicted in the United States District Court for the Eastern District of Louisiana on one count of obstruction of justice, a violation of 18 U.S.C. § 1512(b)(1)(2). The indictment alleged respondents "did knowingly and intentionally corruptly persuade and attempt to persuade [Mr. Aiavolasiti and Mr. Palmisano] with intent to influence their testimony in an official proceeding...." In March 2001, respondents pled guilty to the charges. In the factual basis for the guilty plea, respondents admitted that they had "full knowledge" that Mr. Aiavolasiti and Mr. Palmisano used runners to solicit personal injury clients while employed by respondents.

DISCIPLINARY PROCEEDINGS

Interim Suspension

Following their guilty pleas, respondents and the ODC filed a joint motion in this court requesting that respondents be placed on interim suspension. On April 11, 2001, we placed respondents on interim suspension and ordered that disciplinary proceedings be instituted. In re: Laudumiey, 01-0925 (La.4/11/01), 787 So.2d 275; In re: Mann, 01-0926 (La.4/11/01), 787 So.2d 275.

Formal Charges

On July 23, 2001, the ODC filed identical sets of formal charges against both respondents. The formal charges set forth the facts underlying respondents' convictions, but did not set forth any specific rule violations. On August 22, 2001, the ODC filed a "first supplemental and amending formal charge" against respondents, which alleged respondents' criminal conviction constituted a violation of Rule 8.4 of the Rules of Professional Conduct⁵ and warranted their "permanent disbarment from the practice of law."

Respondents' declinatory and peremptory exceptions asserting numerous due process violations were overruled. Subsequently, their disciplinary proceedings were consolidated and respondents filed admissions to the allegations of professional misconduct.

A formal hearing was conducted before the committee. Respondents testified at the hearing and presented mitigating evidence.

Recommendation of the Hearing Committee

The hearing committee found the ODC proved by clear and convincing evidence respondents violated Rule 8.4(b) based on their commission of a criminal act adversely reflecting on their honesty, trustworthiness, or fitness as lawyers. The committee further found the crime of which they were convicted was a "serious crime" for purposes of Supreme Court Rule XIX § 19(B).

As aggravating factors, the committee recognized respondents' dishonest or selfish motive, pattern of misconduct, multiple offenses, refusal to acknowledge the wrongful nature of the conduct, and substantial experience in the practice of law.⁶ Also, specifically with regard to respondent Mann, the committee noted prior disciplinary offenses.⁷

In mitigation, the committee recognized character or reputation and, in the case of respondent Laudumiey, the absence of a prior disciplinary record. However, the committee specifically declined to find remorse as a mitigating factor, stating:

Respondents knowingly entered into an enterprise with non-lawyers to solicit personal injury cases for personal gain. They gave unfettered discretion to individuals who were not lawyers and essentially gave them a blank check to run the operation. Little control or supervision was offered and the non-lawyers answered only to themselves. To suggest that two lawyers with more than twenty years of experience respectively should have known better is an understatement. Financial gain appears to be the underlying motivation. To be remorseful at this time because one has been caught is of little consequence.

Based on these factors, the committee recommended respondents be permanently disbarred from the practice of law.

Recommendation of the Disciplinary Board

The disciplinary board adopted the committee's findings of fact and conclusion that respondents violated Rule 8.4(b). The board noted that respondents breached duties owed to the public, resulting in actual injury to the legal profession. Relying on the ABA's Standards for Imposing Lawyer Sanctions and jurisprudence from this court, the committee concluded the appropriate baseline sanction for respondents' misconduct is disbarment. Applying the aggravating and mitigating factors cited by the committee, and relying on the Guidelines for Imposition of Permanent Disbarment set forth in Appendix E to Supreme Court Rule XIX, the board unanimously recommended respondents be permanently disbarred from the practice of law.

Respondents filed objections to the board's findings and the severity of the proposed sanctions, and reasserted their due process claims. Accordingly, the court docketed the matter for briefing and argument in accordance with Supreme Court Rule XIX, § 11(G)(1)(b).

DISCUSSION

In their brief and argument to this court, respondents raise two procedural objections to the disciplinary board's recommendation of permanent disbarment. First, they contend the amendments to Supreme Court Rule XIX, § 10(A)⁸ and § 24(A),⁹ which provide for the sanction of permanent disbarment, may not be applied to their conduct in this case, as their conduct occurred prior to the August 1, 2001 effective date of the amendments. Second, they assert that the lawyer disciplinary system set forth in Supreme Court Rule XIX is unconstitutional. We will address these arguments separately.

Application of Supreme Court Rule XIX, § 10 and § 24 to Conduct Occurring Prior to August 1, 2001

In In re: Ruffalo, 390 U.S. 544, 550, 88 S.Ct. 1222, 20 L.Ed.2d 117 (1968), the United States Supreme Court held that a lawyer facing discipline is "entitled to procedural due process, which includes fair notice of the charge." A review of the record in the instant case leaves no doubt that respondents were given fair notice that the ODC intended to seek to have them disbarred on a permanent basis. The ODC filed formal charges against respondents in July 2001. On August 1, 2001, we adopted amendments to Supreme Court Rule XIX, § 10 and § 24 which provide for permanent disbarment. Shortly after we adopted those amendments, the ODC filed a "first supplemental and amending charge" alleging that respondents' conduct warranted permanent disbarment from the practice of law. This amended charge was filed well in advance of the formal hearing. Respondents concede t...