Court Opinion

ID: 9549963
Source: CourtListenerOpinion
Date Created: 2023-08-07 18:27:00.30212+00
Date Added: 2024-06-11T15:21:06.307409
License: Public Domain

OPALA, Chief Justice,
with whom HODGES, Vice Chief Justice, joins, concurring.
In this Bar prosecution for professional misconduct, the court visits public censure upon the Respondent-lawyer, approving the sanction counseled by the Professional Responsibility Tribunal. That body rested its recommendation on the parties’ submission by stipulated facts and on their agreed choice of discipline. The charges under consideration stem from Respondent’s loan-making to clients in violation of Rule 1.8(e).1 The cited rule prohibits legal practitioners from providing financial assis*902tance to clients, except in certain narrowly defined instances.2 I concur in today’s imposition of recommended discipline and I write separately to explain why I am unable to join the dissent which calls for this court’s retrospective invalidation of Rule 1.8(e) on grounds of constitutional infirmity and for Respondent’s exoneration. My counsel is that a reexamination of Rule 1.8(e) be done via a Bar’s legislative-type study rather than by this court acting sua sponte through the process of judicature that employs jurisprudence to effect retrospective changes3 in the rules of professional ethics.
CRITICAL FACTS
According to the record,4 Respondent made loans of $79,304.00 to 161 different clients during an 18-month period. He concedes his conduct violates Rule 1.8(e) and interposes in mitigation that the loans did not bear interest and were made to destitute clients for humanitarian reasons.
I
IN DISCIPLINARY PROCEEDINGS AGAINST A LAWYER THIS COURT WILL NOT TEST BAR-INVOKED ETHICS RULES FOR CONFORMITY TO FUNDAMENTAL LAW, ABSENT RESPONDENT’S TIMELY CHALLENGE
A
Limits Upon Sua Sponte Consideration Of Constitutional And Public-Law Issues
The dissent concludes Respondent’s conduct should be viewed as neither champer-tous or against public policy, nor unethical per se, because Rule 1.8(e) contravenes state and federal fundamental law. While this position is not utterly without merit, I cannot join today in calling for Rule 1.8(e)’s retrospective invalidation.
Sua sponte consideration of a constitutional question which was neither advanced by the briefs nor preserved in the record offends two cardinal precepts of constitutional adjudication: (1) a court should never decide a fundamental-law question in ad-*903vanee of strict necessity nor formulate a norm of constitutional law broader than is required by the precise facts to which it is to be applied5 and (2) a court should not overstep the limits of the Reynolds v. Special Indemnity Fund6 exception.
Reynolds teaches that if in a public-law controversy the aggrieved party’s brief advances the wrong reason for reversal, the reviewing court is free to grant corrective relief from the urged error on an applicable theory chosen sua sponte — i.e., a theory that supports the assigned error but was neither advanced below nor on appeal and is dispositive of the issue raised by the aggrieved party. Reynolds is inappo-site here. Our Reynolds freedom to choose sua sponte the dispositive public-law theory when a wrong one is proffered does not extend to identifying a constitutional flaw7 not urged by the aggrieved party either here or below. Unlike jurisdictional infirmities, into whose presence we must examine even when they are not urged upon us by the parties,8 constitutional flaws may not be corrected in the appellate process sua sponte.
Respondent entered into a stipulation with the Bar, which neither questions the outer limit of Rule 1.8(e)’s champerty definition9 nor its applicability to the instant *904disciplinary proceeding. Champerty — qua criminal offense — is regulated by statute, 21 O.S.1991 § 554.10 It is also an ethics violation under Rule 1.8(e).11 Conduct falling within the purview of § 554 is punishable as a misdemeanor; acts or omissions which come within the ambit of Rule 1.8(e) constitute a disciplinary infraction.12 The constitutional infirmities pressed by the dissent went unnoticed and uncham-pioned both here and below.13 We do not have a roving commission to invalidate the Bar prosecutor’s plea bargains based on an uninvoked constitutional infirmity. Absent a finely targeted challenge by the accused legal practitioner, I would not test here Rule 1.8(e)’s fundamental-law or public-policy orthodoxy.
Furthermore, in the face of the prosecuted lawyer’s silence, I cannot today decide to what extent, if any, the court is bound by the broadly articulated champerty prohibition in § 554. While in crafting a Bar ethics rule we are prone to view ourselves as entirely free from the restraint of that penal statute — because in regulating the practice of law and the conduct of lawyers this court casts itself in the status of an exclusive constitutional law-making body14 — an uncompromisingly absolutist position may be fraught with appreciable danger.15
B.
Section 2201’s “Judicial Notice” Requirement Must Be Invoked By Use Of Adversary Process
Section 220116 of the Oklahoma Evidence Code17 requires us to take “judicial notice” of law that is invoked in the adversary process.18 Judicial notice means only that we dispense with proof of state and federal law — common, constitutional, or statutory law.19 Judicial notice stands in the place of proof and makes evidence unnecessary.20 *905That principle will not aid this Respondent in this disciplinary proceeding. Judicial notice of law is distinguishable from judicial notice of an infirmity in the adversary process. We do not take judicial notice of an infirmity the aggrieved party has not targeted as a reversible flaw.21 The requirement that we dispense with the proof of domestic law does not alter the adversary character of a bar disciplinary proceeding.22
Here the Respondent did not seek to avoid discipline on the grounds that the source of law which is the foundation of this proceeding — Rule 1.8(e) — is either legally or constitutionally infirm. We cannot sua sponte give this Respondent the benefit of an infirmity that was not pressed in an adversary context.
C.
Limits Upon Sua Sponte Consideration Of A Disciplinary Proceeding Concluded By The PRT Upon A Plea Bargain
Another troubling question is how far the court should go in raising constitutional issues sua sponte when, as here, discipline is recommended on the basis of a plea bargain.23
I would give the plea bargain a four-corners’ examination for not more than a superficial conformity to fundamental law and public policy. I would withhold judicial approbation from but a narrow class of agreed dispositions — (a) those in which discipline is too lenient ór too severe, (b) those where the disposition sought to be effected is facially fraught with some fatal fundamental-law flaw, or (c) those where the result would otherwise clearly contravene public policy.24 I would be loath ever to upset a plea bargain by raising sua sponte some nonfacial fundamental-law infirmity in a case like this which tenders for imposition but a mild form of discipline.
II
THE RESTATEMENT (THIRD) GOVERNING LAWYERS
Support for the dissent’s view is found in the tentative draft of the Restatement (Third) Governing Lawyers,25 § 48, which *906restricts advances to clients to circumstances in which the client needs financial assistance to avoid a coerced settlement. Comment d to § 48 notes that while loans to clients beyond litigation expenses are forbidden in most jurisdictions, “they are justified when needed to help a financially pressed client proceed with a suit rather than accepting whatever settlement may be offered. A client whose resources may have been depleted by an injury giving rise to a suit may have difficulty obtaining food, clothing, shelter and medical treatment during protracted litigation.” The same comment adds that banks and other lending institutions “will usually be unwilling to lend on the security of a lawsuit because assessing the claim’s probable worth is often difficult and champerty law may prohibit acquiring an interest in the cause of action as security.” The text of the cited comment concludes that on balance, “it is better for the loan to be permitted than for the client to be saved from conflicts of interest but forced by need to abandon the suit.”26
I would, as the dissent urges, favor a reexamination of Rule 1.8(e) in light of the quoted tentative draft of Restatement (Third). But today, I would counsel the court either (a) to await the final text of Restatement before launching an all-out legislative drive27 for the Rule’s change or (b) to have a Bar committee formulate an interim revision of Rule 1.8(e) to become effective pending adoption of the final text of Restatement.
CONCLUSION
While this Respondent may be deserving of total exoneration on the basis of infirmities urged in the dissent, I cannot, in the absence of a lively controversy, join today in sua sponte consideration of any constitutional issue nor in withholding my imprimatur from the PRT-approved plea bargain. There are here no fatal and facially apparent public-policy or fundamental-law defects. In light of recent trends exemplified by § 48 of Restatement (Third), I would strongly favor a re-examination of Rule 1.8(e), with a view to relaxing its restrictive scope. My counsel to the court is not so much against abuse of judicial process but more so against misuse of our legislative authority. The appeal I make is for an orderly change in the course of charting the permissible bounds of lawyers’ *907conduct. It should be done by our measured and restrained legislative response after full consultation with the Bench, the practising Bar as well as with the academic legal community.

. Rule 1.8(e), Rules of Professional Conduct, 5 O.S.1991, Ch. 1, App. 3-A, provides:
"While representing a client in connection with contemplated or pending litigation, a lawyer shall not advance or guarantee financial assistance to a client, except that a lawyer may advance or guarantee the expenses of litigation, including court costs, expenses of investigation, expenses of medical examination, and costs of obtaining and presenting evidence, provided the client remains ulti*902mately liable for such expenses.” (Emphasis added.)

. See e.g. Oklahoma Bar Ass’n v. Boettcher, Okl., 798 P.2d 1077, 1078 (1990).

. Shaping ethics rules for the Bench and Bar is the Supreme Court’s constitutional exercise of legislative power. Supreme Court of Virginia v. Consumers Union of the United States, 446 U.S. 719, 731, 100 S.Ct. 1967, 1974, 64 L.Ed.2d 641 (1980); Tweedy v. Oklahoma Bar Ass'n, Okl., 624 P.2d 1049, 1052-1053 (1981). Lawmaking function, whether by the Legislature or by this court, must be carried out in conformity to our Constitution. Substantive legislation may not be changed to govern a claim or defense in a pending judicial proceeding. Art. 5, § 52, Okl. Const. A proceeding begun under norms of substantive statutory law then in force remains unaffected by after-enacted legislative changes. Art. 5, § 54, Okl. Const.; First Nat. Bank of Pauls Valley v. Crudup, Okl., 656 P.2d 914, 916-917 (1983).

The dissent would have this court effect a legislative change in the substantive norms of our Bar ethics and make it apply to this pending case in contravention of Art. 5, §§ 52 and 54, Okl. Const.

. The pertinent provisions of the AGREED STIPULATIONS OF FACT AND CONCLUSIONS OF LAW WITH AGREED RECOMMENDATION FOR DISCIPLINE are:
" * * * AGREED FINDINGS OF FACT AS TO COUNT I
5. Between June 6, 1989, and December 28, 1990, Respondent loaned $79,304.00 to 161 different clients.
6. During this same time Respondent earned $1,481,000 on gross receipts of $5,778,-000, including client’s share, and represented more than 1,600 clients.

AGREED CONCLUSIONS OF LAW AS TO COUNT I

7. Respondent’s conduct violated the mandatory provisions of Rule 1.8(e), Oklahoma Rules of Professional Conduct, to wit: * * *

AGREED MITIGATION

9. The loans made by Respondent were non-interest bearing. Respondent loaned money for humanitarian reasons to clients who were destitute, without other means and resources or credit to obtain loans for sustenance during the pendancy [sic] of their disability and in many cases could not work because of their injury. * * *

AGREED RECOMMENDATION FOR DISCIPLINE

11. As discipline in this matter, Respondent should receive a public censure from the Oklahoma Supreme Court. * * * ”

. The prudential rule of necessity, adhered to by all state and federal courts, commands that constitutional issues not be resolved in advance of strict necessity. In re Snyder, 472 U.S. 634, 642-643, 105 S.Ct. 2874, 2880, 86 L.Ed.2d 504 (1985); Brockett v. Spokane Arcades, Inc., 472 U.S. 491, 501-502, 105 S.Ct. 2794, 2801, 86 L.Ed.2d 394 (1986); I.N.S. v. Chadha, 462 U.S. 919, 937, 103 S.Ct. 2764, 2776, 77 L.Ed.2d 317 (1983); Ashwander v. Tennessee Valley Authority, 297 U.S. 288, 347, 56 S.Ct. 466, 483, 80 L.Ed. 688 (1936) (Brandeis, J., concurring); In re Initiative Petition No. 347 State Question No. 639, Okl., 813 P.2d 1019, 1037 (1991) (Opala, C.J., concurring); Smith v. Westinghouse Elec. Corp., Okl., 732 P.2d 466, 467 n. 3 (1987); Schwartz v. Diehl, Okl., 568 P.2d 280, 283 (1977); Dablemont v. State, Department of Public Safety, Okl., 543 P.2d 563, 564-565 (1975); see also Davis v. B.F. Goodrich, Okl., 826 P.2d 587, 593-594 (1992) (Opala, C.J., concurring); In re Initiative Petition No. 348, Okl., 820 P.2d 772, 781, 782 n. 4 (1991) (Opala, C.J., concurring in result); Johnson v. Walters, Okl., 819 P.2d 694, 708, 712 n. 26 (1991) (Opala, C.J., concurring in part and dissenting in part); State ex rel. Okl. Bar Ass’n v. Lobaugh, Okl., 781 P.2d 806, 813 (1988) (Opala, J., dissenting); In re Initiative Petition No. 341, Okl., 796 P.2d 267, 275 (1990) (Opala, V.C.J., concurring in result).
If no constitutional challenge has been advanced, the dictates of fairness are not impugned by the court’s denial of sua sponte consideration. "We do not reach for constitutional questions not raised by the parties.” Mazer v. Stein, 347 U.S. 201, 206 n. 4, 74 S.Ct. 460, 464, 98 L.Ed. 630 (1954) (emphasis mine); Andrews v. Louisville & Nashville Railroad Company, 406 U.S. 320, 324-325, 92 S.Ct. 1562, 1565, 32 L.Ed.2d 95 (1972). See also, Benjamin Cardozo, The Nature of the Judicial Process 30-31 (1921); Edwin W. Patterson, Jurisprudence § 4.62, at 533 (1953).

. Special Indemnity Fund v. Reynolds, 199 Okl. 570, 188 P.2d 841, 842 (1948). See Reynolds v. Special Indem. Fund, Okl., 725 P.2d 1265, 1270 (1986), for application of the Reynolds public-law issue exception.

. Extant jurisprudence allowing in a public-law controversy consideration of theories that were not briefed presents a different question. See Matter of McNeely, Okl., 734 P.2d 1294 (1987); Davis v. Davis, Okl., 708 P.2d 1102 (1985). In both McNeely and Davis, the challenges we considered were raised below. What we provided there was independent argument in support of the challenges the parties pressed for reversal of the trial tribunal’s decision. These examples are distinguishable from that presented by this case. Here no error was assigned either below or in the appellate court. Neither does extant case authority permitting, in a public-law controversy, consideration of a constitutional issue not dealt with at nisi prius lend support to the dissenting view. The constitutional flaw reached in those cases, though not urged in the trial tribunal, was clearly assigned as error before the appellate court. See e.g. Simons v. Brashears Transfer and Storage, Okl., 344 P.2d 1107, 1113 (1959); First Nat'l Bank v. Southland Prod. Co., 189 Okl. 9, 112 P.2d 1087, 1098 (1941), citing Magnolia Pet. Co. v. State, 175 Okl. 11, 52 P.2d 81 (1935), Shaffer Oil & Refining Co. v. County Treasurer, 175 Okl. 6, 52 P.2d 76 (1935).

. This court must inquire sua sponte into its jurisdiction. Cate v. Archon Oil Co., Inc., Okl., 695 P.2d 1352, 1356 (1985); Pointer v. Hill, Okl., 536 P.2d 358, 361 (1975).

. Champerty is the ancient name for a doctrine that prohibits a person from trafficking in another’s litigation interest. Black’s Law Dictionary defines it as: "A bargain by a stranger with a party to a suit, by which such third person undertakes to carry on the litigation at his own cost and risk, in consideration of receiving, if successful, a part of the proceeds or subject sought to be recovered. Schnabel v. Taft Broadcasting Co., Inc., Mo.App., 525 S.W.2d 819, 823.” Id. at 209 (5th Ed. 1979).
*904See in this connection Annot., Validity and Propriety of Arrangement By Which Attorney Pays Or Advances Expenses Of Client, 8 A.L.R.3d 1155, 1158 (1966).

. The pertinent terms of 21 O.S.1991 § 554 are: "Any attorney who either directly or indirectly buys or is interested in buying any evidence of debt or thing in action with intent to bring suit thereon is guilty of a misdemeanor....”

. For the text of Rule 1.8(e), see supra note 1.

. In Oklahoma Bar Ass’n v. Boettcher, supra note 2, the respondent-lawyer was charged with violating DR 5-103(B), 5 O.S.1981, Ch. 1, App. 3, the pre-Code counterpart of Rule 1.8(e). Boettcher, like the present case, came to us on the parties’ submission by stipulated facts and agreed recommendation for discipline. In both cases the parties concede that the disciplinary rule was violated and recommend that public reprimand be imposed as the respondent’s disciplinary sanction.

. See Agreed Stipulations, supra note 4.

. Tweedy v. Oklahoma Bar Ass’n, supra note 3 at 1054-1055.

. Although this court claims for itself a constitutionally invested power to regulate the ethics of lawyers to the exclusion of the legislature, it may not ignore § 554’s outer limit and the judicial gloss placed upon it by the Court of Criminal Appeals. Were the prohibition of § 554 appreciatively more extensive than the permissible conduct allowed under the ethics rules, lawyers might be subject to criminal accountability for acts or omissions which would not offend professional discipline. A sweep of criminal interdiction that is more expansive than the range of a lawyers’ professional freedom must be avoided and the risk of conflict between criminal and ethical accountability minimized.

. The terms of 12 O.S.1991 § 2201(A) are:
"A. Judicial notice shall be taken by the court of the common law, constitutions and public statutes in force in every state, territory and jurisdiction of the United States.”

. 12 O.S.1991 §§ 2101 et seq.

. When somebody invokes state or federal law, we must "notice” it. Benham v. Keller, Okl., 673 P.2d 152, 153 (1983).

. For the rule governing judicial notice of a foreign country’s laws, see Panama Processes v. Cities Service Co., Okl., 796 P.2d 276, 294-295 (1990); McCormick on Evidence § 335 at 413-415 (4th Ed.1992).

. S. Gard, 1 Jones on Evidence, § 2:1 at 30 (1972).
"Judicial notice is the cognizance of certain facts which a judge or jury may properly take or act upon without proof because they are already known to them_ [I]t takes the place of evidence, since it stands for the same thing....” Id., § 2:1 at 30. “The device of judicial notice allows certain specified facts to be established without the introduction into the record of supportive evidence." G. Lilly, An Introduction to the Law of Evidence, § 7 at 10. "[Jjudicial notice *905is a substitute for formal proof, that is, it relieves counsel from the obligation formally to introduce evidence to support a noticed fact.... [Jjudicial notice is a device that both expedites the trial of a case and serves as a method by which the judge can prevent highly improbable findings of fact by the jury. Id., § 7 at 13. "The term ‘judicial notice’ often is applied to the process by which a judge, usually with the assistance of counsel, determines or discovers the procedural or substantive law in his or some other jurisdiction. Usually there is a recourse to statutes, court rules, or cases that are referenced by citation without any need to introduce into evidence the original (or copies) of the pertinent material.” Id. § 7 (Notes, Judicial Notice of Law) at 15.

. Davis v. B.F. Goodrich, supra note 5 at 593.

. State ex rel. Okl Bar Ass’n v. Lobaugh, supra note 5 at 813 (Opala, J., dissenting).

. See in this connection State ex rel. Oklahoma Bar Ass'n v. Lacoste, Okl., 813 P.2d 501, 506-507 (1991) (Opala, C.J., dissenting).

. In State ex rel. Oklahoma Bar Ass’n v. Lacoste, supra note 23, the respondent-lawyer was charged with misrepresentations to a third party and making false statements to the Bar in the course of its investigation. There, I expressed the view that the one-year suspension imposed on the respondent was too harsh when compared to a similar sanction visited upon a lawyer for inflicting gross economic harm upon his clients. Our constitutional responsibility to review bar prosecutions is discharged by giving a meaningful and fair de novo review of the recommended sanction’s correctness. Id., at 506 (Opala, C.J., dissenting).

.The Restatement (Third) Governing Lawyers, tentative draft no. 4, § 48, pgs. 224-225 (April 10, 1991) states:
“§ 48. Forbidden Client-Lawyer Financial Arrangements
(1) A lawyer may not acquire a proprietary interest in the cause of action or subject matter of litigation that the lawyer is conducting for a client, except that the lawyer may:
(a) Acquire a lien as provided by § 55 to secure the lawyer’s fee or expenses; and
(b) Contract with a client for a contingent fee in a civil case except when prohibited as stated in § 47.
(2) A lawyer may not make or guarantee a loan to a client in connection with pending or contemplated litigation that the lawyer is conducting for the client, except that the lawyer may:
*906(a) Advance or guarantee a loan covering court costs and expenses of litigation, the repayment of which to the lawyer may be contingent on the outcome of the matter; and
(b) Make or guaranty a loan on fair terms, the repayment of which to the lawyer may be contingent on the outcome of the matter, if the loan is needed to enable the client to withstand delay in litigation that otherwise might unjustly induce the client to settle or dismiss a case because of financial hardship rather than on the merits. * * * ” (Emphasis added.)

. The Reporter’s Note to § 48 (comment d) observes that “[s]ome authority allows lawyers to advance living expenses to their clients so long as that is not done or promised before the lawyer is retained. E.g., Ala. Rules of Prof. Conduct, Rule 1.8; California Rules of Professional Conduct, Rule 4-210(A)(2) (lawyer may lend to client); N.D. Rules of Prof. Conduct, Rule 1.8(e) (lawyer may guarantee loan to client); People v. McCallum, 341 Ill. 578, 173 N.E. 827 (1930); In re Sizer, 306 Mo. 356, 267 S.W. 922 (1924); Johnson v. Great Northern Ry., 128 Minn. 365, 151 N.W. 125 (1915). See also Texas Code of Professional Responsibility, DR 5-103 (omitting all prohibitions of advances to client); Commission on Professional Responsibility, Roscoe Pound-American Trial Lawyers Foundation, The American Lawyer’s Code of Conduct, Rule 5.6(a) (1980) (allowing advances to client on any terms that are fair).” The § 48 restriction on advances to clients "derives from Minnesota Rules of Professional Conduct, Rule 1.8(e)(3); Louisiana State Bar Assoc. v. Edwins, 329 So.2d 437 (La.1976)." The Note further observes that ”[m]ost jurisdictions ... bar all loans of living expenses. E.g., In re Carroll, 124 Ariz. 80, 602 P.2d 461 (1979); 1 G. Hazard & W. Hodes, The Law of Lawyering 274-75 (2d ed. 1990).” Id. at 230-231.

. The responsibility for legislation, prosecution and adjudication in the entire arena of legal practitioners’ professional discipline is constitutionally reposed in the judicial department. The Bar’s conduct is governed by rules which are promulgated by this court in the exercise of its legislative function as the Bar’s regulator. This law making function is to be distinguished and separate from that which attends an exercise of our jurisdiction as the sole and final arbiter of the practitioner’s status for audience before Oklahoma courts. In the latter capacity this court acts not as a legislator but rather qua adjudicator. Tweedy v. Oklahoma Bar Ass’n, supra note 3 at 1052-1055.