Wednesday, January 18, 2012

This was no peppercorn

In Sunday's Milwaukee Journal Sentinel, community columnist Chuck Baynton, who is a physician and a self-described "peace activist" (normally a synonym for "left wing" activist), tries to play the lawyer's game of hypotheticals to show that Justice Michael Gableman's arrangement with Michael Best was a gift.

He plays it like a guy who went to medical school.

But, in fairness to Dr. Baynton, he's not the only one. Others ahve done the same thing, essentially arguing that Gableman should be subject to professional discipline - (and perhaps even criminal charges under chapter 19) - because the deal that he cut with Michael Best was "too good." The firm didn't, in the view of these two, get "enough" for its services to be something other than a gift.

Think about that for a minute. The argument is that people's careers should be ruined because of a subjective after the fact determination that the deal was just wasn't good enough for the firm.
Dr. Baynton supports this with the reductio ad absurdum suggesting that we'd call it a gift if Michael Best worked for a dollar or a Megabucks ticket. Maybe we would.

Although there is a presumption in the law against requiring that consideration necessary to support a contract to be more than illusory (hence the famous reference to a "peppercorn" being sufficient), we might want to interpret the Judicial Code and Chapter 19 a bit differently. (In fact, I suggested that in one of the first posts I wrote about this.) Perhaps there are some forms of consideration too obviously insubstantial to support the provision of services to a judge or other public official. Maybe a dollar or a Megabucks ticket would fall into that category.

But that's not this case.

This case involved a contingency arrangement in which a lawyer agreed to accept fees only if he won and, even then, only those fees that might be awarded to him on application to the state claims board.
How do we tell if that could be adequate consideration?

Well, one thing we might do is look to see if lawyers ever enter into such arrangements in other contexts where there is no suggestion of a gift. When we do that, we see arrangements that look an awful lot like this. Lawyers in civil rights and class actions cases do it all the time. They agree to accept fees only if they win and, even then, to limit themselves to whatever fees might be awarded on application to a tribunal, usually the court that decides the case.

That is this case.

In almost a month of public discussion of this matter, I have only heard two responses to this. The first is a non sequitur. It says that those arrangements are different because they almost always involve representation of a plaintiff.

But that doesn't tell us why the client's position in the caption ought to matter. These contracts are almost always with the plaintiff because the governing law generally permits - at least in the great run of cases - only plaintiffs to recover. Not true here. The governing statute expressly permits awards to prevailing respondents (the equivalent of a defendant in an ethics case).

A better - but still insufficient argument - focuses on the likelihood of fees being awarded. Note that this argument can't rest on the fact that fees are awarded only if the client (Justice Gableman) prevails. That's true of all contingency arrangements.

Instead, one must argue that it should have been clear to Justice Gableman and Michael Best that it was improbable that the state claims board would award fees even if he won.

But why would they have thought that? The statute is on the books and clearly permits the payment of fees. The fact that it has only been used - and could only have been used - one time reflects nothing more that ethics complaints against judges are rare, not that this type of arrangement is unusual or that fees were unlikely to be awarded. That they were not fully paid in the only case in which the statute has been - or could be - used doesn't tell us much about what would happen here.
The best thing that this argument has going for it is that it was likely that the legislature would have had to approve a fee award. That does make the recovery of fees improbable. Why would we assume that the state claims board and legislature would not honor the fee request of a sitting Supreme Court justice?

To be sure, there were reasons - including political reasons - for the firm and Justice Gableman not to enter into such an arrangement. If I were in the place of either, I might have chosen not to do it. But it's quite another matter to say that the arrangement was unethical or illegal.

I have yet to read an effective and thorough response that supports the claim of illegality. I have seen references to "smell tests" and "gut checks" and I respect that. But we don't send people to jail or remove elected officials from office for misconduct based on olfactory or gastrointestinal disruptions. I have seen off the cuff ipse dixits from out of state law professors (although Professor Gillers apparently agrees with me that the arrangement was not improper.). But mostly I have seen sneering and snarking - accompanied by legal analysis that is the equivalent of holding up a sign at a football game. I have seen mischaracterization of the arguments that I and others have made and a failure to engage that is more consistent with cheerleading than discourse.

Again, recusal is another matter. More to follow.


Display Name said...

And the absence of this arrangement from his financial disclosure forms?

Anonymous said...

Your post is disingenuous. You fail to mention that the Claims Board by statute had a $5000 cap on what it could reimburse. MB & F didn't do Justice Gableman a favor to collect $5000, maybe. MB & F did Justice Gableman a favor to do Justice Gableman a favor. You know it, I know it, the people of Wisconsin know it. Let's not play make-believe.

Your reference to the legislature is a most oblique reference to an argument you've made more openly elsewhere, that the Legislature could have passed a law allowing the reimbursement of more than $5000. Evidently it's done that once before for a portion of a public official's legal fees. This is way too thin a reed to support your argument that this wasn't a gift. It would have taken an Act of Congress to create the reimbursement right required to turn this into something other than a gift. Not really, but an Act of the Wisconsin Legislature. If the world were other than it is, if the laws were other than they are, this wouldn't be a gift. Ba-loney.

Anonymous said...

No one would argue that someone who has suffered personal injuries but is unable to recover damages has received a gift from the attorney who represented her on a contingency fee basis. Furthermore, there is recent precedent in this state that supports the MBF-Gableman arrangement here. A few years ago, a Wisconsin state court judge challenged in federal court the judicial ethics code that prohibited him from running in a judicial election as a Democrat. He won the case and, under the federal statute analogous to the state statute relied on by MBF, his attorneys were awarded fees. No complaint was ever made that he received a gift from the attorneys, whom he paid nothing and who had represented him on a contingency basis under the federal statute.

Anonymous said...

Anon 5:44: No, Siefert v. Alexander does not support the MBF-Gableman arrangement here. The federal statute authorizing an award of attorneys' fees to the prevailing party in civil rights cases, 42 USC section 1988, has no cap on how much can be awarded. Siefert's actual attorneys' fees and expenses were about $52,000, and, evidently after minor quibbling about the reasonableness of something, $50,177.03 was awarded and paid. That's a far cry from the $5000 MBF stood to earn, for what was probably about the same amount of work.

Anonymous said...

Justice Gobleman is a posterboy for shady protocol. The perception is reality, and that is Gobleman used his position to curry favor that otherwise would not be proffered him. Question for the Perfessor - is your role to defend all malfeasance on the right? Call a spade a spade fer cryin out loud! You can still keep your conservative credentials.

Anonymous said...

"But, in fairness to Dr. Baynton, he's not the only one. For example law school graduate (and suspended lawyer) Others ahve done the same thing"

Professor, you probably should proofread before you post.

Yes, "others" have made it well-known of their insistence that the actions undertaken by Gableman, in their view, constitute a breach of judicial ethics.

Now, professor, why did you choose not to name specifically this "law school graduate"?

Why the insinuation regarding this person's PAST problems with their credentials? Indeed, what are the reasons why this person had a suspended license?

Care to elaborate?

True, this person has not been kind to you in a number of his posts, and he has "punked" you out several occasions, but why stoop to his level? I thought you would be above the fray, you know, with your Marquette gig and all.

Apparently, not.

Rick Esenberg said...

Anon 8:37

As to the reference to a suspended lawyer, I obviously wrote something and then intended to edit it out of the post. I have bitten my tongue countless times on that subject. I had intended to do it again but was in the middle of about six things and missed it. (I am, in any event, one of the world's worst proof readers.)

Apparently the guy is leaving Wisconsin and I wish him well.

Rick Esenberg said...

No, there is not a $ 5000 cap. One can seek a higher amount from the legislature - a process that I referred to in my post. That makes it harder (and I acknowledged that) but not so hard as to render it illusory and subject Gableman (and MBF) to potential discipline and criminal charges.

Anonymous said...

Wait a minute. Wait one minute. I've looked at the Claims Board statute, and what it is about is compensating claims against the State. How in God's name would Justice Gableman ever have a claim against the State for reimbursement of his fees spent defending the ethics charge here? I get it that if a public employee, in the course of his or her official duties, had done something that caused legal proceedings to be instituted against him or her, maybe there's some law or theory that would require reimbursement of expenses caused by the performance of their duties. The ethics charge related to ads Gableman ran before he was elected to the Supreme Court. How are fees spent defending them even remotely compensable as a claim against the State of Wisconsin? Isn't this just a fig leaf? Couldn't the fee agreement have said MBF will look solely to any fees awarded under 42 USC section 1988 (which wouldn't apply), or for that matter oil discovered in Gableman's backyard, for any recovery?

The closer you look at this fee arrangement, the stinkier it gets.

Anonymous said...

Hey, Rick, can you do me a favor and stop blogging about this little ethics thing?

Oh, wait. Let me rephrase.

How about them Packers?


Anonymous said...

Christ Seraphim was suspended from office for three years for taking advantage of a cozy deal with Rank & Son -- getting a car rented for $90 to $175 a month below what Rank & Son would have charged a person off the street -- and then sitting in cases in which Rank & Son was a party, and other misconduct.

How is Justice Gableman's cozy deal with MBF any different?

Anonymous said...

"As to the reference to a suspended lawyer, I obviously wrote something and then intended to edit it out of the post."

Yet, the professor leaves up the comment, rather than make the appropriate changes. That busy with thinking of yet another defense for the conduct of Gablemen, huh!

Ken Kerst said...

Well it is obvious to all readers that not-professor Rick is a liar. Why do we privilege his shittings with a response ?

Anonymous said...

" Note that this argument can't rest on the fact that fees are awarded only if the client (Justice Gableman) prevails. That's true of all contingency arrangements."

Of course the argument can rest there. When a lawyer takes a case on contingency, he or she always evaluates their chances of, first, winning the case and, then, recovering fees or a percentage of the award. If the lawyer did not undertake the first part of the analysis, the lawyer would be an idiot. If MBF had no chance of winning, then the arrangement was bogus, even if MBF was certain to recover fees in the (hypothetical) event Gablemen prevailed.

By the way, your conflation of the definition of a gift under the state ethics law with contract formation doctrine was one of the dumbest things I've read in awhile. The statute says "valuable!"

Anonymous said...

There's over 20,000 lawyers in Wisconsin, many of them suspended for unpaid dues (which are bite in the wallet if one isn't making Justice coin, and which support the mandatory bar) and CLEs (another bite in the wallet). If there's another reason beyond that for the suspension for the attorney you reference (and I don't know him at all but have generally found him to be a better read)--although doesn't suggest anything other than that--don't be shy--throw it out there. But if that's all you have, move on to something else, or be the better Christian from the Christian U and help him out. Its not like he didn't complete the college degree. Maybe you can help that guy out too.