Kicking Pot Didn’t Help Movie Exec’s Discipline Defense

By Samson Habte

A Hollywood producer of Oscar-nominated films failed to convince a New York court that it should cut him a break because he’s kicked the marijuana habit that contributed to his ethical infractions in California.

The intermediate appellate panel in his reciprocal attorney discipline case handed Gary Michael Walters a 2 1 2 year suspension Jan. 30, rejecting a plea to show leniency because sobriety has helped him fix the “sloppy habits” that landed him in disciplinary trouble before he transitioned from corporate lawyer to movie executive.

Walters is CEO of Bold Films Inc., which has produced and financed award-winning movies that include Ryan Gosling’s “Drive,” Jake Gyllenhaal’s “Nightcrawler,” and Miles Teller’s “Whiplash.” Walters founded the company in 2004, after nearly two decades of full-time practice that began at Cravath, Swaine & Moore and ended with a solo entertainment firm in Los Angeles.

New York bar authorities initiated this reciprocal discipline proceeding in 2017, after Walter informed them that he had been disciplined or administratively suspended five times while practicing in California.

Every state bar requires dual-licensed members to promptly report discipline in other jurisdictions. Walter’s infractions in California—which involved unpaid dues, practicing while under administrative suspension, and commingling his own money with client funds—dated back to 2003, so his report was about 14 years late.

Dissipating Haze

The court said Walters apologized for his failure to promptly report his discipline in California, and that he said he didn’t think about his obligation to do so because he wasn’t practicing law.

According to the court, Walters also said that “he failed to attend to the administrative aspects of his law practice” after he hung a shingle, and that his daily marijuana use in those years “interfered with his ability to function and meet his responsibilities.”

“Over the last decade,” the court said, “respondent claims he has slowly been trying to get his life in order to which end he ceased using marijuana in 2004; he has closed his client trust account and hired an administrative assistant to make sure his bills are timely paid and his financial obligations met; and he is attempting to make amends for his prior failings which includes resolving his administrative suspension in New York and the matter of reciprocal discipline so that he can seek reinstatement.”

Walters told the court that going forward he intends to “be a fully compliant, trustworthy, responsible and dependable member of the New York bar.”

No Mercy

Walters’ last disciplinary infraction in California happened in 2009, when he issued four checks that were drawn against personal funds that he improperly maintained in a client trust account.

Client monies were not dissipated, but ethics rules forbid such commingling. And Walters’ belated response to a bar inquiry—and his prior record of discipline—led to 18 months of actual suspension.

All told, Walters was suspended from practice in California for 2 1 2 years. Courts deciding reciprocal discipline cases generally give significant weight to the originating jurisdiction’s sanction and deviate from it only infrequently. Disciplinary counsel argued for such deference here, while Walters requested a censure.

Among other arguments, Walters asked the court not to view his failure to promptly report his California discipline as an aggravating factor because it “was not willful but the result of sloppy habits which [he] has now corrected.”

The court wasn’t convinced. “We find that based on respondent’s misconduct taken as a whole, a 2 1 2 -year suspension is in general accord with our precedent involving similar misconduct,” it said.

Walters was represented by Sarah Diane McShea, New York. McShea is a member of the Editorial Board of the ABA/BNA Lawyers’ Manual on Professional Conduct, an ABA and Bloomberg Law publication. She had no role in the production of this article. The First Judicial Department Disciplinary Committee was represented by Chief Counsel Jorge Dopico and Staff Attorney Denice M. Szekely, New York.

The case is Matter of Walters , 2018 BL 29961, N.Y. App. Div., M-2589, 1/30/18 .

To contact the reporter on this story: Samson Habte in Washington at shabte@bloomberglaw.com

To contact the editor responsible for this story: S. Ethan Bowers at sbowers@bloomberglaw.com

The ABA/BNA Lawyers’ Manual on Professional Conduct is a joint publication of the American Bar Association Center for Professional Responsibility and Bloomberg BNA.

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