Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-caed-2_04-cv-01358/USCOURTS-caed-2_04-cv-01358-20/pdf.json

Nature of Suit Code: 791
Nature of Suit: Employee Retirement Income Security Act (ERISA)
Cause of Action: 29:1145 E.R.I.S.A.

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UNITED STATES DISTRICT COURT

EASTERN DISTRICT OF CALIFORNIA

----oo0oo----

JAMES P. DeFAZIO, et al.,

NO. CIV. S-04-1358 WBS GGH

NO. CIV. S-05-0559 WBS GGH

Plaintiffs, NO. CIV. S-05-1726 WBS GGH

CONSOLIDATED 

v. MEMORANDUM AND ORDER RE: 

MOTION FOR PRECLUSION OF 

FURTHER SOLICITATION BY

PLAINTIFFS’ COUNSEL

HOLLISTER, INC.; et al.,

Defendants.

 ----oo0oo----

What has provoked the motion before the court are two

unsolicited letters sent recently to Hollister employees by

counsel for the majority of plaintiffs, Scottlynn J. Hubbard IV

(“Hubbard”). In the first letter, sent June 1, 2005, Hubbard

stated that his firm “has experience representing participants

and beneficiaries of the Hollister Employee Share Ownership Trust

[“HolliShare”] in litigation based on a breach of a fiduciary

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duty in the valuation and sale of plan assets.” The letter goes

on to say that the recipient “may be the victim of such a

breach.” 

Hubbard’s solicitation also touts the experience of his

firm: “As a boutique law firm with almost thirty years of

experience, we specialize in federal litigation and helping those

in need.” It concludes with a statement that his firm would be

available to help the recipient with any similar claims the

recipient “may” have and mentions how to contact the firm.

The first problem with this letter is that at the time

it was written Hubbard had experience representing just one

participant and beneficiary, not “participants and

beneficiaries,” of HolliShare. The second problem is that it

suggests to the reader that Hubbard’s firm has almost thirty

years experience in handling ERISA claims similar to the ones

solicited in the letter. Although his firm has almost thirty

years experience, that experience is in access cases under the

Americans with Disabilities Act, not in ERISA cases.

The second letter, sent April 9, 2007, advises the

recipient that Hubbard’s firm is representing participants and

beneficiaries in this case against Hollister and related

individuals. The biggest problem with this letter is that it

attached a hard copy of a document entitled “Second Amended

Complaint,” which had not yet even been filed, and a CD-ROM

containing that and other documents, alleging “acts of fraud and

concealment against Hollister’s management, which were only

recently discovered, and breaches of fiduciary duty that have

substantially reduced the value of HolliShare.” 

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Defendants now move the court for an order precluding

further solicitation of Hollister employees by plaintiffs’

counsel. Defendants request that the court invoke its inherent

powers to require that plaintiffs’ counsel submit any proposed

solicitation to the court for approval prior to the transmittal

of the communication to any Hollister employee to ensure that

such communications do not violate California Rule of

Professional Conduct 1-400.

Discussion

A federal court has inherent powers to do what may be

necessary to carry out its designated functions. Thus, for

example, the Supreme Court has noted that

Courts of justice are universally acknowledged to be

vested, by their very creation, with power to impose

silence, respect and decorum, in their presence, and

submission to their lawful mandates.

Chambers v. NASCO, 501 U.S. 32, 43 (1991) (quoting Anderson v.

Dunn, 19 U.S. 204, 227 (1821)). 

What defendants ask the court to do now does not

involve the decorum of the courtroom or disobedience to a court

order. Instead, it involves enforcement of the standards of

professional conduct required of members of the State Bar of

California and contained in the Rules of Professional Conduct of

the State Bar of California. Particularly, defendants’ want the

court to intervene in the communications between Hubbard and

third parties which have the effect of neither disrupting nor

interfering with the orderly functioning of the court. 

The court’s inherent authority does extend to the power

to “control admission to its bar and to discipline attorneys who

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In this district, Local Rule 83-180(e) further provides 1

that

 Every member of the Bar of this Court, and any attorney

permitted to practice in this Court under subsection (b)

shall become familiar with and comply with the standards of

professional conduct required of members of the State Bar of

California and contained in the State Bar Act, the Rules of

Professional Conduct of the State Bar of California and

decisions of any Court applicable thereto, which are hereby

adopted as standards of professional conduct in this Court .

. . . No attorney admitted to practice before this Court

shall engage in any conduct which degrades or impugns the

integrity of the Court or in any manner interferes with the

administration of justice.

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appear before it.” Id. at 43 (citing Ex parte Burr, 22 U.S. 529,

531 (1824)). However, particularly when it comes to 1

disciplining attorneys for acts committed outside of the actual

court processes, that power should be exercised “with restraint

and discretion.” Id. at 44.

The State Bar has the power and ability to discipline

its members for violations of the California Rules of

Professional Conduct. It has the mechanisms and personnel set up

specifically for doing that. It is far better equipped and

qualified to exercise that function than is a federal judge who

has neither engaged in the practice of law himself nor been

directly subjected to the standards governing the conduct of

lawyers for nearly 17 years.

It used to be unethical for lawyers to advertize at

all. The very idea of touting one’s own skills and abilities, or

soliciting people to bring lawsuits, used to be considered

unprofessional. Apparently, those ideas are now archaic. Today,

there appears to be little if any distinction between what

lawyers are permitted to do and what used car salesmen do to drum

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up business. The State Bar is far better informed and equipped

than this court to deal with defendant’s complaints.

What defendants ask this court to do extends far beyond

the purview of its responsibilities. Under defendants’ proposal

the court would have to proofread and correct all of Hubbard’s

correspondence to his targeted clientele. Presumably, in order

to maintain the adversary process, before approving any

correspondence the court would also invite a response from

defendants and consider their suggestions. This the court will

not do.

IT IS THEREFORE ORDERED that defendants’ motion for an

order precluding further solicitation of Hollister employees by

plaintiffs’ counsel be, and the same hereby is, DENIED. 

DATED: June 28, 2007

 

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