Leoni v. State Bar

CourtUnited States State Supreme Court (California)
Writing for the CourtBIRD; GRODIN; KAUS
Parties, 704 P.2d 183 Andrew LEONI et al., Petitioners, v. The STATE BAR OF CALIFORNIA, Respondent. L.A. 31851.
Decision Date22 August 1985

Page 423

217 Cal.Rptr. 423
39 Cal.3d 609, 704 P.2d 183
Andrew LEONI et al., Petitioners,
v.
The STATE BAR OF CALIFORNIA, Respondent.
L.A. 31851.
Supreme Court of California,
In Bank.
Aug. 22, 1985.
Rehearing Denied September 25, 1985.

Page 425

[704 P.2d 185] [39 Cal.3d 613] Horvitz & Levy, Ellis J. Horvitz, Encino, and Ellen Lake, San Francisco, for petitioners.

Samuel Bufford, Gendel, Raskoff, Shapiro & Quittner and Fred Okrand, Los Angeles, as amici curiae on behalf of petitioners.

Herbert M. Rosenthal, Truitt A. Richey, Jr., San Francisco, Ellen A. Pansky and R. Gerald Markle, Los Angeles, for respondent.

BY THE COURT.

What is the standard for determining whether a lawyer's solicitation of clients by mass mailings and informational pamphlets is misleading? We are asked to address this issue in our review of a recommendation of the State Bar that petitioners, Andrew Leoni and Houston Slate, be suspended from the practice of law for 30 days because their letter program--the mailing of some 250,000 letters and informational enclosures--allegedly violates the misleading or deceptive communications prohibition of Rule 2-101(A) of the Rules of Professional Conduct of the State Bar. 1

[39 Cal.3d 614] Petitioners contend that this regulation both on its face and as applied, violates the constitutional guarantee of freedom of speech. 2 The American Civil Liberties Union Foundation of Southern California (ACLU), amicus curiae on behalf of petitioners, argues that at issue is the proper standard for determining what constitutes misleading attorney advertising and solicitation; in addition it argues that in the case at bench the evidence is insubstantial to support the State Bar's findings. The ACLU further contends that in failing to make specific findings of violations and in recommending discipline for violations beyond those initially charged, the State Bar failed to comply with the requirement of due process of law.

We analyze petitioners' letter program under the line of cases according qualified protection to commercial speech and examine the cases and policies which govern misleading advertising generally. We hold that Rule 2-101(A)'s content-based regulations of misleading advertising are facially constitutional. Examining petitioners' letter campaign, we conclude that the letters are misleading and that, therefore, Rule 2-101 is also constitutional as applied. Given that this is an evolving area of law, we further conclude that suspension is inappropriately harsh and instead impose public reprimand to be served by this opinion. As for the letters, we conclude that the preferred and least restrictive constitutional remedy is to require petitioners to insert disclaimers or add clarifying language rather than total prohibition.

I. The Slate & Leoni Letter Program

Petitioners Houston Slate 3 and Andrew Leoni 4 are attorneys licensed to practice law in California. They practice under the name of Slate & Leoni, a professional corporation organized under California law. At all times relevant to this proceeding the practice of Slate & Leoni was exclusively before the federal bankruptcy courts.

In 1978, after studying the United States Supreme Court's decision in Bates v. State Bar of Arizona (1977) 433 U.S. 350, (first amendment protects attorney advertising

Page 426

[704 P.2d 186] of prices at which routine legal services will be performed), Slate & Leoni began sending letters to certain defendants regarding legal aspects of debt problems. [39 Cal.3d 615] The letters informed the recipients of the procedural aspects of the case pending against them, as well as the legal rights and remedies of debtors. Slate & Leoni recommended that the recipient consult an attorney--his or her own or Slate & Leoni.

The recipients were defendants in small claims or municipal court actions or were owners of real properties which were in foreclosure. The names and addresses of the recipients were obtained by employees of Slate & Leoni at first and later by a private consulting firm using public records of judicial proceedings in the Los Angeles County courts and listings in public newspapers.

Between November 1978 and July of 1980, 83 different versions of the letters and informational enclosures were sent to approximately 250,000 recipients. The type of letter and enclosure received depended on the type of defendant (business or nonbusiness) and the procedural stage of the case against the defendant. Mailings were sent to defendants against whom: (1) civil complaints for money had been filed; (2) unlawful detainer actions had been filed; 5 (3) civil complaints for personal injury and property damage had been filed; (4) requests to enter default had been filed in collection actions; (5) writs of execution had been issued; and (6) writs of execution had been served. The letters did not identify the name or court number of the pending case. Instead, Slate & Leoni marked the letters with in-house filing numbers.

In addition to the letters, Slate & Leoni enclosed various informational pamphlets which were prepared by petitioner Slate. One letter, "Money Problems?" was included in virtually all of the correspondences. A second pamphlet, "How to Pay Debts Under Court Protection" was included in correspondences with individuals against whom civil complaints for money had been filed, requests to enter default in collection actions had been filed, and writs of execution had been issued or served. This pamphlet describes a chapter 13 bankruptcy, although the word "bankruptcy" is not mentioned in the pamphlet. In cases where a writ of execution had been issued against a defendant, a third enclosure, "What is a Writ of Execution?" was also included. A fourth enclosure, "If You Are in Business and You Are Facing A Writ of Execution," and a fifth enclosure, "Is Your Business Having Money Flow Problems?" were sent to business defendants against whom a writ of execution had issued. Additional enclosures included "Order for [39 Cal.3d 616] Debt Relief," "The Consolidation Plan," and "How to Get a Release of a Garnishment on Your Pay-Check [sic]."

Slate & Leoni transmitted roughly 2,000 letters per month initially in 1978 and transmitted roughly 10,000 letters per month by 1980. The firm obtains at least one client for every 100 letters sent out and approximately 25 percent of the firm's chapter 13 (of the Bankruptcy Act) filings are attributable to the letter program. Chapter 13 cases reflect a portion, the extent of which is not clear from the record, of petitioners' law firm business. As the letters indicate, the lawyers will answer questions regarding the cases or mailings free of charge. Mr. Slate estimated that the office receives 5 or 6 callers per 100 letters whose questions are answered free of charge. Additionally, the enclosure "Money Problems, Lawsuits? Here are Some Suggestions" lists a telephone number where the recipient can call and listen to a recorded explanation of how a bankruptcy works. The parties stipulated that the letter program is designed, in part, to generate paying clients. Because the exclusive practice of the firm was in federal bankruptcy court, the firm would not charge a client unless there was an actual filing in the bankruptcy court. Additional

Page 427

[704 P.2d 187] services were performed without charge such as calls to negotiate with creditors and assistance with preparation of in pro. per. filings for state court proceedings.

There are numerous letters and enclosures in the record because Slate & Leoni revised their materials. For instance, the initial version of the enclosure "What is a Writ of Execution?" stated that "if you have $1,000 in a certain type of account in a savings and loan association, it cannot be seized by the officer." Because a husband and wife could not each have $1,000 in such an account, Slate & Leoni voluntarily changed the enclosure because they "wanted it to be exactly true and have nothing that might mislead somebody."

In January 1979, Mr. Slate wrote to the president of the State Bar of California outlining the letter program and enclosing samples of some of the letters which were actually sent. He requested that the State Bar undertake the letter program to provide information to persons who appear to be in need of legal assistance with their debt problems. The president thanked Mr. Slate for his letter and good intentions and forwarded the proposal to the Legal Services Division of the State Bar.

Two years later, on February 3, 1981, disciplinary proceedings were commenced by the State Bar on the complaint of members of the bar and the public concerning letters received.

[39 Cal.3d 617] II. State Bar Proceedings

The disciplinary proceedings began with a notice to show cause which charged petitioners with willful violations of Rules 2-101 and 7-103. Five violations were alleged: (1) unlawful solicitation of business in violation of Rule 2-101(B); 6 (2) communication with parties represented by counsel on the subject of that representation in violation of Rule 7-103; 7 (3) use of untrue statements in violation of Rule 2-101(A)(1), use of statements, or arrangement of statements in a manner or format, which was false, deceptive, or tended to confuse, deceive or mislead the public in violation of Rule 2-101(A)(2), omission of necessary facts in violation of Rule 2-101(A)(3), and transmittal of communications in an objectionable manner in violation of Rule 2-101(A)(6). 8 The two remaining counts--interference with the administration of justice and misrepresentations to judicial officers--were dismissed by the State Bar examiners for lack of evidence.

Page 428

[704 P.2d 188] At the proceeding before the Hearing Panel of the State Bar, the parties entered into a stipulation regarding the details of the letter program and the complaints received by the State Bar. Petitioner Slate was the only witness who actually testified. His deposition was also...

To continue reading

Request your trial
69 practice notes
  • Part II
    • United States
    • Federal Register December 12, 2003
    • December 12, 2003
    ...and are therefore subject to the requirements of Sec. 11.701. Like the communications found violative in Leoni v. State Bar, supra, 39 Cal.3d 609 (Cal. 1985) and People v. Morse, 21 Cal.App.4th 259, fn. 13 (1993), affd. In re Morse, 11 Cal. A4th 184 (Cal. 1995) they have potential to mislea......
  • Practice and procedure: Patent and trademark cases rules of practice; representation of others before Patent and Trademark Office,
    • United States
    • Federal Register December 12, 2003
    • December 12, 2003
    ...and are therefore subject to the requirements of Sec. 11.701. Like the communications found violative in Leoni v. State Bar, supra, 39 Cal.3d 609 (Cal. 1985) and People v. Morse, 21 Cal.App.4th 259, fn. 13 (1993), affd. In re Morse, 11 Cal. A4th 184 (Cal. 1995) they have potential to mislea......
  • S.F. Apartment Ass'n v. City & Cnty. of S.F., Case No. 15–cv–01545–PJH
    • United States
    • United States District Courts. 9th Circuit. United States District Courts. 9th Circuit. Northern District of California
    • November 5, 2015
    ...the federal or state constitution. Kasky , 27 Cal.4th at 969, 119 Cal.Rptr.2d 296, 45 P.3d 243 (2002); see also Leoni v. State Bar , 39 Cal.3d 609, 614 n. 2, 217 Cal.Rptr. 423, 704 P.2d 183 (1985).Reed is inapplicable to the present case, for several reasons, including that it does not conc......
  • Low v. Linkedin Corp., Case No. 11–CV–01468–LHK.
    • United States
    • United States District Courts. 9th Circuit. United States District Courts. 9th Circuit. Eastern District of California
    • July 12, 2012
    ...actually misleading or which has a capacity, likelihood or tendency to deceive or confuse the public.” See e.g., Leoni v. State Bar, 39 Cal.3d 609, 626, 217 Cal.Rptr. 423, 704 P.2d 183 (1985). In 2004, Proposition 64 amended the standing requirements under the FAL so that a private plaintif......
  • Request a trial to view additional results
69 cases
  • S.F. Apartment Ass'n v. City & Cnty. of S.F., Case No. 15–cv–01545–PJH
    • United States
    • United States District Courts. 9th Circuit. United States District Courts. 9th Circuit. Northern District of California
    • November 5, 2015
    ...the federal or state constitution. Kasky , 27 Cal.4th at 969, 119 Cal.Rptr.2d 296, 45 P.3d 243 (2002); see also Leoni v. State Bar , 39 Cal.3d 609, 614 n. 2, 217 Cal.Rptr. 423, 704 P.2d 183 (1985).Reed is inapplicable to the present case, for several reasons, including that it does not conc......
  • Low v. Linkedin Corp., Case No. 11–CV–01468–LHK.
    • United States
    • United States District Courts. 9th Circuit. United States District Courts. 9th Circuit. Eastern District of California
    • July 12, 2012
    ...actually misleading or which has a capacity, likelihood or tendency to deceive or confuse the public.” See e.g., Leoni v. State Bar, 39 Cal.3d 609, 626, 217 Cal.Rptr. 423, 704 P.2d 183 (1985). In 2004, Proposition 64 amended the standing requirements under the FAL so that a private plaintif......
  • People v. Cole, No. D040475.
    • United States
    • California Court of Appeals
    • November 26, 2003
    ...is actually misleading or "has a capacity, likelihood or tendency to deceive or confuse the public." (Leoni v. State Bar (1985) 39 Cal.3d 609, 626, 217 Cal.Rptr. 423, 704 P.2d Pearle asserts that the court erred in finding that its advertising was misleading because it did not eva......
  • U.D. Registry, Inc. v. State, No. B179653.
    • United States
    • California Court of Appeals
    • October 30, 2006
    ...federal Constitution. (Kasky v. Nike, Inc., supra, 27 Cal.4th at p. 959, 119 Cal. Rptr.2d 296, 45 P.3d 243; see Leoni v. State Bar (1985) 39 Cal.3d 609, 614, fn. 2, 623-624, 217 Cal.Rptr. 423, 704 P.2d 183; ARP Pharmacy Services, Inc. v. Gallagher Bassett Services, Inc. (2006) 138 Cal. App.......
  • Request a trial to view additional results

VLEX uses login cookies to provide you with a better browsing experience. If you click on 'Accept' or continue browsing this site we consider that you accept our cookie policy. ACCEPT