Summary
The District of Columbia Court of Appeals adopted disciplinary recommendations arising from attorneys’ representation of more than 100 security officers in an FLSA collective action. The court held that John F. Kennedy intentionally misappropriated settlement funds and disbarred him, nunc pro tunc to May 4, 2021; it suspended Kathleen A. Dolan for nine months for negligent misappropriation and related violations. The court also held that the attorneys violated rules governing aggregate settlements, client communication, fees, and handling of client funds.
Holdings
- Lawyers representing individual clients in a collective action must comply with D.C. Rule of Professional Conduct 1.8(f) and obtain each client’s informed written consent, after consultation, before making an aggregate settlement. The absence of Rule 23-style notice and court-approval safeguards means a collective action is not exempt from Rule 1.8(f).
- Kennedy violated Rule 8.4(c) by deliberately concealing the settlement terms and misleading clients by telling them they risked exclusion from the case or receiving nothing if they did not sign the settlement authorization form.
- Until the clients authorize an agreed fee amount, the entire settlement award is entrusted client property. A lawyer may not unilaterally take a portion of a lump-sum settlement as fees merely because the lawyer performed legal work or may ultimately have a right to payment.
- Kennedy’s knowing and concealed taking of unauthorized client funds constituted intentional misappropriation and required disbarment because no extraordinary mitigating circumstances were present.
- Dolan’s conduct constituted negligent rather than intentional misappropriation, warranting a nine-month suspension subject to specified practice-management, trust-account, and probation conditions.
Questions Presented
- Whether respondents violated D.C. Rule of Professional Conduct 1.8(f) by entering into an aggregate settlement of multiple clients’ claims without each client’s informed written consent after consultation.
- Whether a collective action that is not governed by the safeguards applicable to a certified Rule 23 class action falls within any exception to Rule 1.8(f).
- Whether Kennedy violated Rule 8.4(c) by concealing settlement terms and misleading clients into signing settlement authorization forms.
- Whether respondents misappropriated entrusted client funds by unilaterally taking 67% of a lump-sum settlement as attorney’s fees without client authorization.
- Whether Kennedy’s misappropriation was intentional and required disbarment, and whether Dolan’s misappropriation was negligent and warranted a nine-month suspension with reinstatement conditions.
Disposition
other
Cases Cited (11)
- In re Samad, 51 A.3d 486, 495 (D.C. 2012) (per curiam)(followed)
- Matter of Addams, 579 A.2d 190, 191 (D.C. 1990) (en banc)(followed)
- In re Travers, 764 A.2d 242, 250 (D.C. 2000)(followed)
- In re Haar, 698 A.2d 412, 422, 424 (D.C. 1997)(followed)
- Knisley v. City of Jacksonville, 497 N.E.2d 883, 887-88 (Ill. App. Ct. 1986), appeal denied, 505 N.E.2d 353 (Ill. App. Ct. 1987)(followed by analogy)
- Tax Auth., Inc. v. Jackson Hewitt, Inc., 898 A.2d 512, 514-15, 522 (N.J. 2006)(followed by analogy)
- Fegley v. Higgins, 19 F.3d 1126, 1134-35 (6th Cir. 1994)(applied)
- In re Choroszej, 624 A.2d 434, 436 (D.C. 1992) (per curiam)(distinguished)
- In re Herbst, 931 A.2d 1016, 1016-17 (D.C. 2007) (per curiam)(followed by analogy)
- In re Bailey, 883 A.2d 106, 123 (D.C. 2005)(followed by analogy)
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Court Document
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