In-House Counsel Whose License Lapsed Gets Six-Month Suspension From Practice

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By Samson Habte  

A six-month suspension from practice without the added requirement of a formal reinstatement hearing is an appropriate sanction for an in-house corporate attorney who engaged in unauthorized practice by working for her employer while her license was administratively suspended, the Massachusetts Supreme Judicial Court concluded April 16 (In re Gustafson, Mass., No. SJC-11307, 4/16/13).

The court rejected bar counsel's argument that the sanction--which was determined by a single justice before the full court entered the picture--should be overruled because it was “markedly disparate from those ordinarily entered by the various single justices in similar cases.”

“The cases relied on by the single justice support her judgment as to the sanction,” the court declared in an unsigned opinion.

Accordingly, it concluded, the single justice did not err by declining to impose a lengthier suspension which would have triggered a requirement that the lawyer undergo a formal reinstatement hearing before a return to practice would be possible.

Repeatedly Ignored

According to the opinion, Lauren Gustafson was admitted to practice in December 2008 and registered with the Massachusetts Board of Bar Overseers in January 2009.

A year later, the court said, Gustafson's employment address changed but she failed to report that fact to the board or to pay an associated fee for amending her initial registration statement. The board eventually filed a petition to have Gustafson administratively suspended for her registration failures.

An order granting the petition for an administrative suspension was issued a month later, making her subject to rules governing suspended attorneys--which include a prohibition on engaging in legal work.

“Notwithstanding her administrative suspension,” the court said, “in November, 2010, Gustafson was hired as in-house counsel at a company having its headquarters in Massachusetts.”

Shortly after finding new employment, Gustafson submitted a registration statement, a request for reinstatement, and a check to the board. The board returned the check, advising Gustafson that she owed more than the amount submitted and that it would present her request for reinstatement when her fees were paid in full.

“Gustafson did not respond,” the court said. “Eight months later,” it added, “bar counsel received a request for investigation alleging that, despite her ongoing suspension, Gustafson continued to be employed as an attorney.” Bar counsel forwarded the complaint to Gustafson but received no response. Gustafson also failed to respond to a subpoena that the board served on her.

Patience Runs Out

When Gustafson was eventually reached by telephone, the court noted, she agreed to appear at a hearing, at which she admitted her unauthorized practice and was given “a complete set of registration materials, none of which she returned.”

Bar counsel then filed a petition for discipline. Gustafson was charged with violations of Massachusetts Rules of Professional Conduct 3.4(c) (knowing disobedience of rules of tribunal); 5.5(a) (practice of law in violation of order of suspension); 8.1(b) (failure to respond to lawful demand for information from disciplinary authority); 8.4(d) (conduct prejudicial to administration of justice); and 8.4(g) (failure to cooperate with bar counsel).

The petition further alleged that Gustafson violated court rules that govern “the periodic registration of attorneys” and “requir[e] attorneys subject to administrative suspension to file affidavits of compliance and other documentation” with bar counsel and the court.

“Gustafson failed to file a timely answer to the petition or otherwise cooperate in the investigation,” the court noted, “and her default was entered.”

The board then voted to recommend that Gustafson be suspended from the practice of law for six months and that she be required to petition for reinstatement and pass the Multistate Professional Responsibility Examination before being permitted to return to practice.

Gustafson failed to appear at the hearing before a single justice. The justice ordered that she be suspended for six months.

“The single justice did not accept the provision requested by the board that would have required the respondent to comply with the formal reinstatement provisions in [Massachusetts Rule 4:01, §18(1)(a)],” the court noted.

Bar counsel appealed and pressed for a suspension of one year and a day which, among other things, would activate the formal reinstatement requirements of that rule.

Not 'Markedly Disparate.'

“The sole issue on appeal,” the court noted, “is whether the sanction imposed by the single justice 'is markedly disparate from those ordinarily entered by the various single justices in similar cases.'” The court concluded that it was not.

The board's recommended sanction should be afforded “substantial deference,” the justices acknowledged, but they observed that the court also considers “what measure of discipline is necessary to protect the public and deter other attorneys from the same behavior.”

The single justice was thus justified in declining to accept the recommendation, the court said, because she reasonably “concluded that Gustafson's conduct had not been shown to be more egregious” than the conduct of other lawyers who received similar sanctions for unauthorized practice violations while under administrative suspension.

The cases relied on by bar counsel “additionally involved misconduct other than that stemming from the conduct underlying an administrative suspension,” the court explained.

“Nor do we view the respondent's failure to answer the petition for discipline as itself meriting a greater sanction,” it added, noting that “the rules provide the penalty for failure to file a timely answer, which is that the allegations and charges are deemed admitted.”

The Office of the Bar Counsel was represented by Assistant Bar Counsel Dorothy Anderson, Boston. Gustafson, of Boston, was not represented.

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