Court Opinion

ID: 9368508
Source: CourtListenerOpinion
Date Created: 2023-02-04 01:00:31.580931+00
Date Added: 2024-06-11T17:16:08.654873
License: Public Domain

Case: 22-30231     Document: 00516635208         Page: 1    Date Filed: 02/03/2023

           United States Court of Appeals
                for the Fifth Circuit                           United States Court of Appeals
                                                                         Fifth Circuit

                                                                       FILED
                                                                 February 3, 2023
                                  No. 22-30231                    Lyle W. Cayce
                                                                       Clerk

   Jonathan B. Andry, Louisiana Bar Roll No. 20081,

                                                                        Appellant.

                  Appeal from the United States District Court
                     for the Eastern District of Louisiana
                           USDC No. 2:15-MC-2478

               ON PETITION FOR PANEL REHEARING

   Before Stewart, Willett, and Oldham, Circuit Judges.
   Don R. Willett, Circuit Judge:
          The petition for panel rehearing is GRANTED. We withdraw our
   prior opinion of November 29, 2022, and substitute the following:
          This case concerns attorney misconduct in the Court-Supervised
   Settlement Program established in the wake of the 2010 Deepwater Horizon
   oil rig disaster. Jonathan Andry, a Louisiana attorney representing oil spill
   claimants in the settlement program, was accused of funneling money to a
   settlement program staff attorney through improper referral payments. In a
   disciplinary proceeding, the en banc Eastern District of Louisiana found that
   Andry’s actions violated the Louisiana Rules of Professional Conduct and
   suspended him from practicing law before the Eastern District of Louisiana
   for one year. Andry appeals, arguing that the en banc court misapplied the
   Louisiana Rules of Professional Conduct and abused its discretion by
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                                           No. 22-30231

   imposing an excessive sanction. Finding that some, but not all, of Andry’s
   arguments have merit, we REVERSE the en banc court’s order in part,
   AFFIRM in part, and REMAND for further proceedings.
                                                 I
           This matter comes to us for the third time,1 bringing with it a nearly
   ten-year procedural history. In the months following the 2010 Deepwater
   Horizon disaster, hundreds of individual and class actions were filed in state
   and federal courts on behalf of the thousands of victims. Many of those claims
   were consolidated in the Eastern District of Louisiana Deepwater Horizon
   multi-district litigation (MDL).2 In 2012, BP reached a settlement with the
   MDL plaintiffs, which established the Court-Supervised Settlement
   Program (CSSP) to evaluate and award the payment of economic damages
   to individuals and businesses affected by the oil spill.
           In 2013, misconduct by several attorneys in connection with the
   CSSP process came to light. Specifically, Lionel Sutton, a Louisiana
   attorney who had been representing CSSP claimants with his wife Christine
   Reitano through their law firm, Sutton Reitano, accepted a job as a staff
   attorney with the CSSP, subsequently withdrawing from representation of
   claimants in the CSSP. Sutton and Appellant Andry were friends from law
   school, and Sutton referred one of his prior CSSP clients, Casey Thonn, to
   Andry Lerner LLC (“AndryLerner”), the law firm Andry owned in
   partnership with attorney Glen Lerner.3 Sutton then communicated to

           1
            See In re Deepwater Horizon, 824 F.3d 571 (5th Cir. 2016) (per curiam); In re Andry,
   921 F.3d 211 (5th Cir. 2019).
           2
             Transfer Order from the Judicial Panel on Multidistrict Litigation, In re Oil Spill
   by Oil Rig “Deepwater Horizon” in the Gulf of Mexico, on April 20, 2010, No. 2:10-MD-217
   (E.D. La. Aug. 10, 2010).
           3
               Sutton continued to represent Thonn in an unrelated civil matter.

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   Lerner that he was expecting a portion of the fee earned by AndryLerner from
   its representation of Thonn. Andry later directed another AndryLerner
   attorney to send an “Attorney Referral Agreement” to Sutton and Reitano
   providing that all attorney fees recovered in the Thonn matter would be
   divided equally between Sutton Reitano and AndryLerner. This agreement
   was never executed. Lerner then transferred portions of the contingency fees
   that AndryLerner received in the Thonn matter to Sutton, sending him three
   payments totaling more than $40,000 over the course of six months.
          Upon receiving an anonymous tip concerning improprieties in the
   CSSP process, the MDL district court appointed Louis Freeh as special
   master to investigate the misconduct. The special master’s report
   recommended that Andry be prevented from representing CSSP claimants.
   Judge Barbier, the district court judge overseeing both the MDL and CSSP,
   ordered Andry to show cause as to why he should not adopt the
   recommendation. Following an evidentiary hearing and an opportunity to
   respond in writing, Judge Barbier determined that Andry violated the
   Louisiana Rules of Professional Conduct and disqualified him from
   participating further in the CSSP or collecting fees.
          Andry then appealed to this court in his first of three appeals.4
   Appealing with Lerner, Andry argued that the district court misapplied the
   Louisiana Rules of Professional Conduct and abused its discretion by
   imposing a one-year suspension.5 We disagreed, holding that the district
   court “did not abuse its discretion in finding that Andry and Lerner violated

          4
              See In re Deepwater Horizon, 824 F.3d 571.
          5
              Id. at 577.

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   the Louisiana Rules of Professional Conduct or in fashioning an appropriate
   sanction.”6
          At the district court’s direction, the special master filed a disciplinary
   complaint against Andry with the en banc court of the Eastern District of
   Louisiana (EDLA). The disciplinary complaint was referred to the EDLA’s
   Lawyer Disciplinary Committee, which submitted a confidential report to the
   en banc court. Concluding that a hearing was unnecessary given the prior
   extensive investigation and hearing in the MDL, the en banc court filed an
   order finding Andry violated the Louisiana Rules of Professional Conduct
   and suspending him from practicing law before the EDLA for one year.
   Andry appealed to this court for the second time.7 This time, we agreed with
   him, holding that Andry was entitled to a disciplinary hearing under the
   EDLA Rules for Lawyer Discipline.8
          On remand, the en banc court directed the EDLA’s Lawyer
   Disciplinary Committee to prosecute the matter. Following discovery and
   evidentiary hearings, the en banc court found that Andry clearly violated
   duties owed to the legal system, the court, and the profession through his
   violation of the Louisiana Rules of Professional Conduct. Specifically, the en
   banc court held that Andry violated:
          (1) Rule 1.5(e) which governs the division of fees between
          attorneys at different firms;

          6
              Id. at 586.
          7
              In re Andry, 921 F.3d 211.
          8
             Id. at 215 (“Thus, we conclude that the EDLA Rules require that Andry receive
   a Rule 7 hearing before discipline is imposed by the Eastern District.”).

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          (2) Rule 8.4(a), which prohibits assisting another attorney in
          violating the Rules of Professional Conduct;
          (3) Rule 8.4(c), which prohibits engaging in conduct involving
          dishonesty, deceit, and misrepresentation; and
          (4) Rule 8.4(d), which prohibits conduct that is prejudicial to
          the administration of justice.
   The en banc court suspended Andry from practicing law in EDLA for one
   year (three concurrent one-year suspensions) for violating Rules 1.5(e),
   8.4(a), and 8.4(d). For Andry’s violation of Rule 8.4(c), the court ordered a
   public reprimand.
          In this third appeal to this court, Andry argues that the en banc court
   misapplied Louisiana Rules of Professional Conduct 1.5(e), 8.4(a), and
   8.4(d). Andry also contends that the en banc court abused its discretion by
   imposing a too-harsh sanction. Andry does not challenge the en banc court’s
   application of Rule 8.4(c).
                                           II
          A federal court may hold attorneys accountable to the state code of
   professional conduct. Resolution Trust Corp. v. Bright, 6 F.3d 336, 341 (5th
   Cir. 1993). “Whether an attorney’s conduct is subject to sanction under a
   specific rule of professional responsibility is a legal issue which this court
   reviews de novo.” In re Mole, 822 F.3d 798, 802 (5th Cir. 2016) (per curiam).
   “Sanctions imposed against an attorney by a district court are reviewed for
   abuse of discretion.” United States v. Brown, 72 F.3d 25, 28 (5th Cir. 1995)
   (citing Chambers v. NASCO, Inc., 501 U.S. 32 (1991)). “That discretion is
   abused if the ruling is based on an ‘erroneous view of the law or on a clearly
   erroneous assessment of the evidence.’” Id. (quoting Chaves v. M/V Medina
   Star, 47 F.3d 153, 156 (5th Cir. 1995)).

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                                         III
                                          A
          Andry first argues that Rule 1.5(e) of the Louisiana Rules of
   Professional Conduct does not apply to payments between successive
   attorneys. We hold that the rule is ambiguous as to whether it applies in these
   circumstances. Therefore, the en banc court erred in failing to apply the rule
   of lenity in Andry’s favor.
          Rule 1.5(e) says:
          A division of fee between lawyers who are not in the same firm
          may be made only if:
                 (1) the client agrees in writing to the representation by
                 all of the lawyers involved, and is advised in writing as
                 to the share of the fee that each lawyer will receive;
                 (2) the total fee is reasonable; and
                 (3) each lawyer renders meaningful legal services for the
                 client in the matter.
   La. R. Prof’l Conduct 1.5(e).
          Andry contends that the rule solely applies where two or more
   attorneys remain jointly responsible to a client, not in situations where a
   successor attorney splits a fee with a predecessor. Andry’s interpretation is
   not unreasonable based on the rule’s text. Rule 1.5(e)(1)’s requirement that
   the client agree to representation by all of the lawyers involved can reasonably
   be understood to mean all lawyers presently involved in the matter. Similarly,
   1.5(e)(3) is written in present, not past, terms: “[E]ach lawyer renders
   meaningful legal services.” This too implies that the rule was intended to
   apply when multiple attorneys render legal services at the same time.

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           At minimum, the text of the rule leaves some ambiguity as to whether
   it applies in this context. This ambiguity is seemingly resolved in Andry’s
   favor by advisory opinions from both the Louisiana State Bar Association
   (LSBA) and American Bar Association (ABA). In a footnote of a publicly
   published advisory opinion, the LSBA Rules of Professional Conduct
   Committee stated: “Rule 1.5(e) would not apply” “where lawyers never
   worked together simultaneously on the case.” Louisiana State Bar Ass’n
   Rules of Pro. Conduct Comm., Public Op. 12-RPCC-018, at 2 n.3 (2012).
   Similarly, the ABA’s Committee on Ethics and Professional Responsibility
   issued a formal advisory opinion discussing Rule 1.5(e) of the Model Rules of
   Professional Conduct, which similarly governs attorney fee sharing. 9 The
   opinion stated that the rule “is limited to situations where two or more
   lawyers are working on a case simultaneously—not sequentially.” ABA
   Comm. on Ethics & Pro. Resp., Formal Op. 487 (2019).
           Still, there are factors that muddy the water. The single strongest
   factor weighing against Andry’s interpretation is that, when faced with
   identical facts, the same party, the same application of Rule 1.5(e), and a
   similar proceeding below in Andry’s first appeal of the MDL court’s
   sanctions order, we held squarely that “the district court properly applied

           9
             Louisiana’s Rule 1.5(e) of Professional Conduct mirrors Rule 1.5(e) of the Model
   Rules of Professional Conduct, but the two are not identical. The model rule says a division
   of fee between lawyers who are not in the same firm may be made only if:
           (1) the division is in proportion to the services performed by each lawyer
           or each lawyer assumes joint responsibility for the representation;
           (2) the client agrees to the arrangement, including the share each lawyer
           will receive, and the agreement is confirmed in writing; and
           (3) the total fee is reasonable.
   Model Rules of Pro. Conduct r. 1.5(e) (Am. Bar Ass’n 2020).

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   Rule 1.5(e).”In re Deepwater Horizon, 824 F.3d at 582.10 As support, we cited
   the district court’s statement during its oral findings in the MDL that Rule
   1.5(e) is intended to ensure that attorneys “can’t just get a fee for referring a
   case to another lawyer without doing some work.” Id. at 581.
           Precedent from Louisiana courts, while not conclusive, also weighs
   against Andry. For instance, in Bertucci v. McIntire, the court applied Rule
   1.5(e)’s close predecessor11 to a referral fee situation in which the referring
   attorney “maintained an attorney client relationship” after referral to
   another attorney but only performed a small proportion of tasks on the
   matter. Bertucci v. McIntire, 96-933 (La. App. 5 Cir. 3/25/97), 693 So.2d 7.
   And in Dukes v. Matheny, the court went a step further, indicating that Rule
   1.5(e)’s predecessor rule12 would apply to a fee arrangement in a situation
   where “the attorneys ha[d] not been jointly involved in the representation of
   the client.” Dukes v. Matheny, 2002-0652, p. 5 (La. App. 1 Cir. 2/23/04), 878

           10
              Andry’s argument has evolved slightly. Appealing his initial sanctions, Andry
   argued that the case “was not a referral fee … but instead, was a quantum meruit fee,”
   which does not trigger Rule 1.5(e). In this case, Andry drops the implication that the
   specific type of fee matters, arguing instead that Rule 1.5(e) never applies to payments
   between successive firms when there is no joint representation. Despite this subtle
   difference, our holding in In re: Deepwater Horizon was broad enough to address both
   arguments. 824 F.3d at 582.
           11
              In 1997, Rule 1.5(e) of the Louisiana Rules of Professional Conduct stated that
   division of fees between lawyers who are not in the same firm may be made only if:
           (1) The division is in proportion to the services performed by each lawyer
           or, by written agreement with the client, each lawyer assumes joint
           responsibility for the representation;
           (2) The client is advised of and does not object to the participation of all
           the lawyers involved; and
           (3) The total fee is reasonable.
   La. R. Prof’l Conduct 1.5(e) (1997).
           12
                Dukes v. Matheny applied the version of Rule 1.5(e) detailed in note 11.

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   So.2d 517, 520. These cases suggest that the current version of Rule 1.5(e)
   would apply to fee splitting between successive attorneys.
          The principal cases Andry relies on are not particularly illuminating
   in either direction. Saucier v. Hayes Dairy Products, Inc. and O’Rourke v.
   Cairns together stand for the proposition that when a predecessor attorney
   signs a contingency-fee contract with a client before being discharged, he is
   entitled to share in the contingency fee that a successor attorney earns, with
   the fee apportioned based on several factors, including the work performed
   by the predecessor attorney. See Saucier, 373 So.2d 102 (La. 1979); O’Rourke,
   95-3054 (La. 11/25/96), 683 So.2d 697 (La. 1996). This holding is not
   necessarily inconsistent with the application of Rule 1.5(e) to fee splitting
   between successive attorneys. In fact, neither Saucier nor O’Rourke mentions
   Rule 1.5(e). And there is no clear indication that the fee splitting between
   successive attorneys mandated by the court in those cases failed to comply
   with Rule 1.5(e), as it existed at the time.
          Given the compelling arguments on both sides, we conclude that Rule
   1.5(e) is ambiguous as applied to this set of facts. “Because attorney
   suspension is a quasi-criminal punishment in character, any disciplinary rules
   used to impose this sanction on attorneys must be strictly construed resolving
   ambiguities in favor of the person charged.” United States v. Brown, 72 F.3d
   25, 29 (5th Cir. 1995) (citing Matter of Thalheim, 853 F.2d 383, 388 (5th Cir.
   1988)). Thus, we hold that the en banc court erred by failing to apply the rule
   of lenity in favor of Andry.
                                           B
          Andry next argues that the en banc court misapplied Louisiana Rule
   of Professional Conduct Rule 8.4(a) which states, in relevant part, that it is
   professional misconduct for a lawyer to “knowingly assist or induce another
   to [violate or attempt to violate the Louisiana Rules of Professional Conduct],

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   or do so through the acts of another[.]” La. R. Prof’l Conduct 8.4(a). The en
   banc court held that Andry violated this rule by “facilitat[ing] the payment
   of Thonn attorneys’ fees to Sutton despite the lack of a written fee splitting
   agreement between Thonn and the various firms involved,” thereby assisting
   Lerner and Sutton in violating the Rules. This holding is dependent on the
   underlying proposition that payments between successor law firms with no
   joint representation can violate Rule 1.5(e). Since we hold that the en banc
   court misapplied Rule 1.5(e), we also hold that the en banc court erred in its
   application of Rule 8.4(a).
                                            C
          Next, Andry argues that the en banc court erred in holding his conduct
   violated Rule 8.4(d), which prohibits attorneys from “[e]ngag[ing] in
   conduct that is prejudicial to the administration of justice.” La. R. Prof’l
   Conduct 8.4(d). Andry contends that because the payments between Lerner
   and Sutton were “permissible under Louisiana law and did not violate Rule
   1.5(e),” they do not constitute misconduct. Andry asserts that underlying
   misconduct, not merely “the appearance of impropriety” is necessary for an
   8.4(d) violation.
          Here, we disagree. Andry’s argument ignores that it was not just the
   appearance of misconduct, but actual misconduct that the en banc court
   uncovered. Andry’s underlying misconduct was the “payment or facilitation
   of payments” to a CSSP staff attorney while representing claimants in the
   CSSP process. It was these payments, not merely the perception they
   created, that violate Rule 8.4(d).13 And damningly, the en banc court found

          13
             It is true that in its application of Rule 8.4(d), the en banc court heavily
   emphasized the negative perception that Andry’s behavior created rather than Andry’s
   underlying misconduct. However, “we may affirm for any reason supported by the record,

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   that Andry did not act blindly, concluding that “Andry acted intentionally
   and knowingly to his own financial advantage.” Courts, including this one,
   have regularly applied 8.4(d) in cases where attorneys attempt, or create the
   appearance of attempting, to influence impartial decisionmakers improperly.
   See In re Mole, 822 F.3d 798 (holding that attorney hiring another attorney for
   the purpose of motivating judge’s recusal is prejudicial to the administration
   of justice and implies an ability to improperly influence a judge in violation of
   Louisiana Rules of Professional Conduct 8.4(d)); In re LeBlanc, 2007-1353
   (La. 11/27/07), 972 So.2d 315 (per curiam) (holding that attorney giving
   money to judge for his niece’s campaign for state legislature is prejudicial to
   the administration of justice in violation of Louisana Rules of Professional
   Conduct 8.4(d)). This case is no different.
           Rule 8.4(d), more than Rule 1.5(e), gets to the heart of Andry’s
   misconduct. The core of the wrongdoing was not the way fees were split
   between attorneys, but the fact that money was sent to an attorney involved
   in the claims administration process by an attorney representing claimants.
   Thus, the en banc court did not err in finding that Andry violated Rule 8.4(d).
                                                 D
           Andry’s final argument is that the en banc court abused its discretion
   in choosing suspension as its sanction. As we have already held that Rule
   1.5(e) and 8.4(a) do not apply to Andry’s conduct, we only review the en banc
   court’s imposition of a one-year suspension for the 8.4(d) violation.
           Andry first contends that the en banc court abused its discretion in
   using a 12-month suspension as the baseline sanction for his rule violations.
   The Supreme Court of Louisiana, referring to conduct prejudicial to the fair

   even if not relied on by the district court.” United States v. Gonzalez, 592 F.3d 675 (5th Cir.
   2009).

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   administration of justice, has said “[t]he baseline sanction for this type of
   misconduct is a period of suspension . . . .” In re Ruffin, 2010-2544, p. 6 (La.
   1/14/11), 54 So.3d 645, 648 (per curiam). And, as Andry’s brief itself points
   out, courts have often imposed a 12-month suspension for misconduct
   creating the appearance of impropriety. See In re Mole, 822 F.3d 798. “The
   question before us is not whether we would [impose the same punishment]
   but, rather, whether the district court abused its discretion in doing so.” In
   re Sealed Appellant, 194 F.3d 666, 673 (5th Cir. 1999). We hold the en banc
   court did not abuse its discretion in using a one-year suspension as a baseline
   sanction for Andry’s Rule 8.4(d) violation.
          Andry next argues that the en banc court abused its discretion by
   weighing too many aggravating and too few mitigating factors. When
   imposing sanctions against an attorney, “a court should consider the duty
   violated, the attorney’s mental state, the actual or potential injury caused by
   the attorney’s misconduct, and the existence of aggravating or mitigating
   factors.” Id. Louisiana courts have typically looked to the ABA’s Standards
   for Imposing Lawyer Sanctions for direction on which aggravating and
   mitigating factors to consider. La. State Bar Ass’n v. Perez, 550 So.2d 188 (La.
   1989). Here, the en banc court considered the ABA standards in detail,
   accounting for both aggravating and mitigating factors. Andry may not agree
   with the way the en banc court weighed the factors, but we cannot say that
   the sanctions were based on an erroneous view of the law or the facts.
   “Because the en banc court considered and applied the ABA standards
   before imposing discipline, and because the sanction imposed is consistent
   with Louisiana precedent, we hold that the en banc court did not abuse its
   discretion in imposing its chosen sanction.” In re Mole, 822 F.3d at 807.
                                         IV

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          The en banc court misapplied Louisiana Rules of Professional
   Conduct Rule 1.5(e) and 8.4(a) but not Rule 8.4(d). Additionally, the en banc
   court did not abuse its discretion by imposing a one-year suspension on
   Andry for his violation of 8.4(d).
          Accordingly, we REVERSE the en banc court’s order suspending
   Andry from the practice of law for one year each for violations of Rule 1.5(e)
   and 8.4(a). We AFFIRM the en banc court’s holding that Andry violated
   Rule 8.4(d). Finally, we REMAND to the en banc court for further
   proceedings. On remand, the court is free to impose on Andry whatever
   sanction it sees fit for the 8.4(d) violation, including but not limited to its
   previous one-year suspension.

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