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Board of Professional Responsibility v. Justice

Supreme Court of Tennessee, Knoxville

July 2, 2019

BOARD OF PROFESSIONAL RESPONSIBILITY OF THE SUPREME COURT OF TENNESSEE
v.
LORING EDWIN JUSTICE

          Session Heard at Nashville May 31, 2019

          Direct Appeal from the Chancery Court for Knox County No. 189578-1, 189418-3 Robert E. Lee Davies, Senior Judge

         This lawyer-disciplinary proceeding stems from a Knoxville attorney's conduct in a federal personal injury lawsuit where the attorney represented the plaintiff. The federal district court imposed a discovery sanction against the corporate defendant and ordered it to pay the attorney's fees and costs the plaintiff had incurred in locating and deposing a witness the corporate defendant failed to disclose. When the plaintiff's lawyer submitted an itemization of fees and costs to the federal district court, the lawyer falsely claimed as his own work the work that a paralegal had performed. The lawyer also submitted a written declaration along with the itemization falsely claiming that he had kept contemporaneous records of his time in the case and attesting to the truth and accuracy of the itemization. The lawyer also requested in the itemization "grossly exaggerated and unreasonable" attorney's fees of more than $103, 000 for work beyond the scope of the federal district court's order. Later, the lawyer testified falsely in a hearing before the federal district court by reaffirming the truth and accuracy of the itemization and the written declaration. A Hearing Panel of the Board of Professional Responsibility ("Hearing Panel") determined that the lawyer had violated four provisions of the Tennessee Rules of Professional Conduct ("RPC")-RPC 1.5(a) (Fees); RPC 3.3(a) (Candor Toward the Tribunal); RPC 3.4(b) (Fairness to Opposing Party and Counsel); and RPC 8.4(a) and (c) (Misconduct). The Hearing Panel found six aggravating and two mitigating factors and sanctioned the lawyer with a one-year active suspension and twelve additional hours of ethics continuing legal education. The Board of Professional Responsibility ("Board") and the lawyer appealed to the Chancery Court for Knox County. Tenn. Sup. Ct. R. 9, § 1.3. The trial court affirmed the Hearing Panel's findings of fact and conclusions of law but modified the sanction to disbarment. The trial court concluded that Standard 5.11 of the ABA Standards for Imposing Lawyer Sanctions ("ABA Standards"), which identifies disbarment as the presumptive sanction, applies and that the aggravating and mitigating factors do not warrant a lesser sanction than disbarment. The lawyer appealed, and after carefully reviewing the record and applicable authorities, we affirm the trial court's judgment in all respects, including its modification of the sanction to disbarment.

         Tenn. Sup. Ct. R. 9, § 1.3 (currently Tenn. Sup. Ct. R. 9, § 33.1(d)) Direct Appeal; Judgment of the Trial Court Affirmed

          Linn Guerrero, Knoxville, Tennessee, for the appellant, Loring E. Justice.

          Gerald Morgan and William C. Moody, Nashville, Tennessee, for the appellee, Board of Professional Responsibility.

          Cornelia A. Clark, J., delivered the opinion of the Court, in which Jeffrey S. Bivins, C.J., and Sharon G. Lee, Holly Kirby, and Roger A. Page, JJ., joined.

          OPINION

          CORNELIA A. CLARK, JUSTICE

         I. Factual and Procedural Background

         A. Hearing Panel Proof

         Loring Edwin Justice grew up in Oak Ridge, Tennessee, obtained his undergraduate degree in 1995 from the University of Tennessee, and in 1998, graduated from Yale University School of Law. That same year he obtained his license to practice law in Tennessee, and from 1998-1999, Mr. Justice worked as a judicial law clerk for a judge of the United States Court of Appeals for the Sixth Circuit. After working the next year as an associate at a Nashville law firm, in 2000, Mr. Justice returned to East Tennessee and founded Loring Justice PLLC ("the law firm"), where he has practiced ever since.

         From May to September 2009, Mr. Benjamin Kerschberg worked for the law firm. Mr. Justice and Mr. Kerschberg met while they were both students at Yale Law School. They remained friends after law school and both served as judicial clerks for the same federal circuit court judge. Mr. Kerschberg did not obtain his Tennessee law license, so he worked as a contract paralegal for the law firm, and he billed the law firm for his services by submitting invoices with narrative entries describing the tasks performed, the date the services were rendered, and the time he spent on the tasks, in quarter-hour increments.

         During the time Mr. Kerschberg worked for the law firm, Mr. Justice represented Scotty Thomas in a personal injury lawsuit ("the Thomas case") in the United States District Court for the Eastern District of Tennessee ("District Court") against Lowe's Home Centers ("Lowe's"). Mr. Thomas alleged that, on June 21, 2005, while he was working for a merchandising company inside a Lowe's store near Knoxville, a large stack of metal roofing sheets collapsed on top of him, causing very serious injuries, including brain damage. Lowe's denied liability and also denied having any knowledge or records showing that the incident occurred or that the merchandising company was in the Lowe's store on the date of the alleged incident.

         Mr. Thomas recalled a female Lowe's employee assisting him after the incident, however, so during discovery Mr. Justice repeatedly asked Lowe's to identify this employee. Lowe's failed to disclose this employee's name, even though she was a human resources manager for Lowe's, was onsite at the Lowe's store the day the incident allegedly occurred, and made an appointment for Mr. Thomas at a health clinic the day of the incident. In July 2010, Mr. Justice learned her identity from a medical record he obtained by subpoena from the health clinic where Mr. Thomas was first treated for his injuries.

         By this time, Mr. Justice had already moved for a default judgment based on Lowe's discovery violations. The District Court held the motion in abeyance until December 1, 2010, and then referred it to a federal magistrate judge, who concluded that Lowe's had failed to satisfy its discovery obligations and that "the Plaintiff should be compensated for the labor and costs incurred in finding [the witness], because these costs were necessitated by [Lowe's] failure to properly investigate the allegations of this suit." The magistrate judge also recommended that Lowe's "be required to pay all reasonable fees and expenses incurred in locating and deposing [the witness], including attorneys' fees, transcription costs, court reporter fees, and other costs" and that Mr. Justice be required "to file an affidavit and/or documentation evidencing the fees, expenses, and costs incurred."

         On March 15, 2011, the District Court adopted in part the magistrate judge's recommendations.[1] The District Court required Lowe's to "pay Plaintiff [Mr. Thomas] all reasonable attorney's fees and expenses incurred in locating and deposing [the witness], including attorney's fees, transcription costs, court reporter fees, and other costs" and required Mr. Justice to provide the District Court by April 8, 2011, "documentation evidencing the fees, expenses, and costs incurred, associated with the discovery of [the witness]." The District Court gave Lowe's fourteen days thereafter "to file objections to the reasonableness of the fees and costs requested," after which the District Court would determine "the final amount of the monetary sanctions."

         Mr. Justice submitted a preliminary itemization by the initial deadline but obtained an extension of time and submitted the final itemization and fee petition ("Itemization") to the District Court on April 22, 2011. The Itemization included 288 entries for work and expenses incurred from January 9, 2009 to April 8, 2011, listed 371.5 hours of work attributed to three lawyers and four assistants, and sought $106, 302.00, which included more than $103, 000 in attorney's fees. Of the attorney hours, 325.5 were attributed to Mr. Justice and billed at the rate of $300 per hour. Only eleven hours were attributed to Mr. Kerschberg and billed at the rate of $90 per hour. Along with the Itemization, Mr. Justice submitted a written declaration attesting under penalty of perjury that he had maintained contemporaneous records of the work performed on the Thomas case and that the Itemization was true and correct.

         Questions were raised in the District Court about the Itemization, in part because several of the narrative entries purporting to describe Mr. Justice's work were identical, or nearly identical, to entries in the invoices Mr. Kerschberg had submitted to Mr. Justice's law firm from May to September 2009 describing Mr. Kerschberg's work.

         At a hearing in the District Court on February 17, 2012, Mr. Justice testified at length, as did several other witnesses. Upon considering the proof, the District Court suspended Mr. Justice from practicing law in the District Court for six months.[2] Mr. Justice appealed his suspension, but the United States Court of Appeals for the Sixth Circuit affirmed, and the United States Supreme Court denied his petition for writ of certiorari.

         While the federal proceedings were pending, a lawyer with whom Mr. Kerschberg had discussed the matter reported it to the Board. At Mr. Justice's request, the Board held its investigation in abeyance pending disposition of some of the federal proceedings. Eventually, the Board completed its investigation and filed a petition for discipline against Mr. Justice on September 25, 2013.[3] The Board alleged that Mr. Justice had violated RPC 1.5(a) (Fees), RPC 3.3(a)(1) (Candor Toward the Tribunal), RPC 3.4(b) (Fairness to Opposing Party and Counsel), and RPC 8.4(a), (b), (c), and (d) (Misconduct).

         The Hearing Panel convened from January 20-23, 2015. The Board presented no live witnesses. As for its claim that Mr. Justice violated RPC 1.5(a) by charging an unreasonable attorney fee, the Board presented the District Court's order and Mr. Justice's Itemization. The Board asserted that many of the entries in the Itemization were for work completely unrelated to locating and deposing the witness, such as: (1) attending the Tennessee Rule of Civil Procedure 26(f) discovery conference; (2) preparing the initial written discovery; (3) preparing an amended complaint; (4) meeting with his client; (5) reading hotel reservations; (6) researching electronic filing rules; (7) talking with the clerk's office about electronic filings; (8) practicing a motion argument in front of his paralegal; (9) locating an expert witness; and (10) workshopping the case at the American Association for Justice Deposition College.

         The Board also introduced Mr. Kerschberg's deposition upon written questions, his 2009 invoices, and excerpts of his former testimony in the District Court to establish that Mr. Justice had claimed Mr. Kerschberg's work as his own. In his deposition and in his testimony in the District Court, Mr. Kerschberg stated that he had personally performed the work described in his invoices, that Mr. Justice had paid the invoices without question, and that he had no knowledge of Mr. Justice ever recording his own time on the Thomas case or on any other case. Mr. Kerschberg recognized the possibility that Mr. Justice could have done work on the Thomas case without his knowledge that was similar to his own, and he acknowledged using Mr. Justice's notes on occasion to describe his own work in the narrative invoice entries. But Mr. Kerschberg consistently testified that the narrative invoice entries described his own work, not Mr. Justice's work, and maintained that, to his knowledge, Mr. Justice had never kept time on the Thomas case or any other case.

         The Board emphasized as well that seventeen Itemization entries were virtually identical to entries in Mr. Kerschberg's invoices in terms of the dates, descriptions of the work, and time necessary to perform the tasks.[4] A side-by-side comparison of the Itemization and invoice entries appears below.

a. June 13, 2009
Kerschberg
1.25 Revision of Motion to Have Requests for Admission Deemed Admitted.
Justice
1.2 Revision of Motion to Have Requests for Admission Deemed Admitted
b. June 14, 2009
Kerschberg
2.25 Added Loring edits to Motion to Deem Requests for Admissions admitted. Added section about Letter to Clint Woodfin and Motion to Supplement. Researched electronic filing rules for the E.D. Tenn. Researched proper procedure for filing Amended Complaint (Local Rules; Scheduling Order; FRCP).
Justice
2.2 Edits to Motion to Deem Requests for Admissions admitted. Added section about Letter to Clint Woodfin and Motion to Supplement. Researched electronic filing rules for the E.D. Tenn.
c. June 16, 2009
Kerschberg
2.5 All final preparations of Amended Complaint and Motion to Deem Requests For Admissions Deemed Admitted. Preparation of all PDF exhibits. Compilations of files. Filing with E.D. Tenn. via ECF. Hard copies of everything for file.
Justice
2.5 All final preparations of Amended Complaint and Motion to Deem Requests for Admissions Deemed Admitted. Preparation of all PDF exhibits. Compilation of files. Filing with E.D. Tenn. via ECF. Hard copies of everything for file.
d. June 16, 2009
Kerschberg
3.0 Edited Motion to Compel Discovery and Memorandum In Support thereof prepared by Juliane Moore.
Justice
3.0 Preparation and editing of Motion to Compel Discovery and Memorandum In Support partially prepared by legal assistant
e. June 17, 2009
Kerschberg
1.0 Talked to Angela Brush at district court to correct misunderstandings re our filings. Second conversation with LJ about Consent Motion To Amend with Clint Woodfin. Drafted Consent Motion for review by Clint Woodfin.
Justice
1.0 Talked to Angela Brush at district court to correct misunderstandings re our filings
f. June 17, 2009
Kerschberg
4.0 Continued to revise and rewrite Motion to Compel Discovery.
Justice
4.0 Continued to research, revise and rewrite Motion to Compel Discovery
g. June 18, 2009
Kerschberg
4.5 Motion to Compel Discovery.
Justice
4.5 Continued research, revision and refinement of Motion to Compel Discovery
h. June 19, 2009
Kerschberg
.5 Letter to Bob Davies regarding additional materials needed from MSG.
Justice
5 Letter to Bob Davies regarding additional materials needed from MSG about the project
i. July 16, 2009
Kerschberg
25 Reviewed Loring's notes from meeting with Clint Woodfina [sic] and calendared follow-up call to Cory re: Clint's call.
Justice
2 Reviewed notes from meeting with Clint Woodfin and calendared follow-up call to Cory Kitchen re: Clint's call
j. July 22, 2009
Kerschberg
5.0 Drafted and typed memo for trip to ...

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