Attorney Grievance Commission v. Litman

HARRELL, J. This reciprocal disciplinary action involves Donald Saunders Litman (“Litman” or “Respondent”), who was admitted to the Bar of this Court on 18 January 1985 and to the Bar of the ²⁰⁷ Commonwealth of Pennsylvania in 1989. The Supreme Court of Pennsylvania censured publically Litman on 27 November 2012 for violating certain of Pennsylvania’s professional conduct and disciplinary rules. Pursuant to Maryland Rules 16-751 and 16-773, the Attorney Grievance Commission of Maryland, through Bar Counsel, filed a Petition for Disciplinary or Remedial Action on 19 December 2013 against Litman based on his misconduct in Pennsylvania. Bar Counsel attached to its Petition a certified copy of the 12 July 2012 Order of the Pennsylvania Supreme Court, a transcript of the public censure, and the 6 March 2012 Report and Recommendation of the Disciplinary Board of the Supreme Court of Pennsylvania.

This Court issued a Show Cause Order on 20 December 2013. Bar Counsel, in its response, argued that ordering corresponding discipline in Maryland would result in grave injustice and, rather, that Litman’s misconduct warranted disbarment in Maryland. Litman, in response, requested that this Court not impose any discipline as to do so would result in grave injustice to him. He contended also that he was not afforded due process in the Pennsylvania disciplinary proceedings.

We entertained the parties’ oral arguments on 3 September 2014. I. Facts In reciprocal discipline cases, pursuant to Rule 16-773(g), the factual findings of the originating jurisdiction are treated ordinarily as conclusive evidence of an attorney’s misconduct. Atty. Griev.

Comm’n v. Kourtesis, 437 Md. 436, 445 , 87 A.3d 1231, 1235 (2014). This does not preclude necessarily us from considering other evidence provided by the parties, id., but “we do not relitigate factual matters or a final adjudication by another appropriate tribunal in a disciplinary proceeding.” Atty. Griev. Comm’n v. Haas, 412 Md. 536, 546 , 988 A.2d 1033, 1039 (2010).

As it turns out, the material facts of the present case are undisputed. 1 ²⁰⁸ The setting for what became Litman’s misconduct began before Litman commenced his representation of his client in federal court in Pennsylvania. Hanoverian, Inc., a Delaware corporation, submitted the winning bid for a Pennsylvania landfill sold at auction pursuant to a U.S. Bankruptcy Court order. Hanoverian received a quitclaim deed from the Bankruptcy Trustee on 9 April 2004. Neither the Bankruptcy Court’s order nor the quitclaim deed purported to transfer the solid waste permit, issued by the Pennsylvania Department of Environmental Protection (“DEP”) to the previous owner, Quaker Alloy, Inc., needed to operate the landfill. 2 On 3 August 2004, Hanoverian purchased the corporate name “Quaker Alloy, Inc.” from the Trustee, again pursuant to the approval of the Bankruptcy Court.

Neither the Bankruptcy Court’s order nor the sale documents provided for the transfer of any rights under the DEP permit. Between April 2004 and April 2006 Hanoverian and the DEP were in communication about its assumption of operations at the landfill. Hanoverian’s President and CEO, Donald Metzger, and its general counsel, Craig Edwards, met with representatives of the DEP about the landfill’s status. In a letter dated 31 March 2006, the DEP indicated that: (1) Hanoverian would most likely need to apply for a new permit or obtain reissuance of the existing permit; (2) explained the DEP’s concerns with the operation of the landfill; and (3) requested documentation demonstrating that Hanoverian was ²⁰⁹ authorized to do business in Pennsylvania.

Edwards responded that the landfill was being transferred to Quaker Alloy, Inc. and that, to his knowledge, Hanoverian was not required to register in order to do business in Pennsylvania. Fifteen days after Edward’s response, the DEP notified the Bankruptcy Trustee in a letter that the solid waste permit had been revoked because of Quaker Alloy, Inc.’s dissolution and abandonment of the permitted facility without providing for final physical closure of its operation. The DEP sent a copy of the letter to Quaker Alloy’s address of record, but the letter was returned as undeliverable. A notice of the revocation was published in the 29 July 2006 issue of the Pennsylvania Bulletin (Pennsylvania’s equivalent of the Maryland Register).

In June of 2006, Respondent joined Edwards in forming a law firm, Edwards & Litman, whose sole clients were entities in Donald Metzger’s group of companies, including Hanoverian. Edwards was the firm’s managing partner. He continued to act as general counsel to Hanoverian and Metzger’s other companies. After commencing representation of Hanoverian, Litman filed a notice of appeal with the Pennsylvania Environmental Hearing Board on behalf of “Hanoverian, Inc. d/b/a Quaker Alloy,” challenging the DEP’s revocation of the solid waste permit.

Subsequently, the DEP declared forfeit the bond for the operation of the landfill, submitted by Quaker Alloy prior to its bankruptcy, and commenced an action to collect the bond. Litman responded with a second administrative appeal contesting the bond forfeiture. On 7 December 2006, the Hearing Board issued orders granting motions by the DEP to compel discovery from Hanoverian and consolidating Hanoverian’s appeals. That same day, the DEP issued an Administrative Order charging Hanoverian and Metzger with past and ongoing violations for operating the landfill without obtaining a permit or submitting a bond, failing to implement an approved closure plan, and failing to provide required water sampling and analysis.

In response to this initiative, Litman asserted, ²¹⁰ among other things, that Hanoverian had acquired Quaker Alloy, Inc. from the Bankruptcy Trustee, along with Quaker Alloy’s interests in the permit. On 26 December 2006, Edwards filed amendments to Quaker Alloy’s articles of incorporation with the Corporations Bureau of the Pennsylvania Department of State. The amendments provided that Hanoverian’s CEO, Metzger, was president, secretary, and treasurer of Quaker Alloy; restructured the capitalization of the corporation; and stated that the corporation would be known as Quaker Alloy, Inc. Hanoverian had applied earlier to the Corporations Bureau for a certificate of authority and registration of the name “Quaker Alloy.” Hanoverian filed a third appeal with the Environmental Hearing Board on 8 January 2007, alleging that the DEP’s actions were unlawful under federal bankruptcy law. Hanoverian, through Litman, alleged that the DEP: violated the automatic stay on actions against the assets of the bankrupt entity without permission of the Bankruptcy Court; failed to provide appropriate notice of the revocation of the permit and bond; and, slandered Hanoverian through a press release that harmed allegedly the company’s reputation and the reputation of the bankrupt entity.

The Environmental Hearing Board consolidated this appeal with the other two pending appeals. On 19 April 2007, Litman filed a Notice of Removal, on behalf of Hanoverian, Metzger, and Quaker Alloy, Inc., with the U.S. District Court for the Middle District of Pennsylvania, seeking to remove the consolidated administrative proceedings from the Environmental Hearing Board to the District Court. The DEP moved to remand to the Environmental Hearing Board and requested sanctions and attorney’s fees against Litman and the parties named in the Notice of Removal. Both sides briefed their positions. 3 The District Court remanded the case, as requested by the ²¹¹ DEP, because the Notice of Removal was untimely. 4 Hanoverian was required to file the Notice of Removal with the District Court within 30 days of the last Notice of Appeal filed with the Environmental Hearing Board.

Litman did not file the Notice of Removal until 91 days after the relevant Notice of Appeal. Litman’s conduct of the federal litigation was not well received by Chief Judge Yvette Kane of the District Court. First, Litman argued that the Notice of Removal should not be barred for untimeliness because the DEP did not provide actual notice of the permit revocation or bond forfeiture. The District Court noted that this was inapposite to the issue of timeliness.

Further, the District Court stated there was “ample evidence” that Hanoverian had constructive notice, including an unequivocal statement in its 28 August 2006 administrative Notice of Appeal, that it became aware of the revocation through the publication in the Pennsylvania Bulletin. According to a Pennsylvania statute, the DEP’s notice in the Bulletin was sufficient under Pennsylvania law. Litman’s other arguments fared no better. According to Litman, the DEP refused to comply with discovery until April 2007, which caused his delay in filing the Notice of Removal.

According to Chief Judge Kane, however, this contention lacked even “a shred of support in the record.” The District Court found that it was, in fact, Hanoverian that failed to comply with discovery. Rather than confronting directly in his papers submitted to the District Court the issue of the sanctions sought by the DEP, Litman counter-attacked, accusing the DEP of corruption, mismanagement, and extortion. Chief Judge Kane found no evidence to support these assertions. As a result of her views of Litman’s and his firm’s handling of the federal litigation, the Chief Judge sanctioned Litman and his law firm, Edwards & Litman, for their representation in the matter. ²¹² Litman and his firm were ordered to pay $5,555.17 in attorneys’ fees to the DEP.

The District Court sanctioned Litman and his firm under FRCP 11 for the contentions and arguments in Hanoverian’s pleadings and papers filed in the case. According to Chief Judge Kane’s opinion, Litman and the firm committed a number of violations: mounting frivolous legal contentions; making gross misrepresentations of existing law; making factual claims without evidentiary support; using misrepresentations as a litigation tool to increase the cost of litigation for the DEP; not citing to the record in pleadings and papers, thereby requiring circuitous research by the District Court; and, failing to make a reasonable inquiry into the facts and law. Chief Judge Kane noted that there was nothing to suggest that Litman was not acting in an intentional manner and found no mitigating circumstances. After the District Court remanded the case to the Environmental Hearing Board, Litman resurrected before the Board the same factual and legal claims regarding the DEP that had been discredited previously by the District Court. 5 As a result, the DEP filed a Motion for Sanctions for Litman’s misconduct in the administrative matter.

In opposition to the motion for sanctions, Litman continued to assert that: (1) the sale of the landfill approved by the Bankruptcy Court included the transfer of the permit; (2) Hanoverian was the beneficial or equitable owner of the permit; and, (3) Quaker Alloy was the permittee because the bankrupt entity’s assets and name had been acquired by Hanoverian. Litman raised also several ²¹³ other frivolous arguments, such as arguing that the DEP’s notices regarding the administrative sanctions contentions, addressed to Edwards and the firm Edwards & Litman, at the address shared by Litman, were not effective notice to Lit-man. Hanoverian’s outstanding appeals before the Environmental Hearing Board were mooted eventually by Hanoverian’s resale of the landfill, after which the new purchaser sought a reissuance of the permit from the DEP and resolved by a settlement agreement, dated 23 October 2008, the other outstanding disputes with the DEP, including the pending motion for administrative sanctions. On 18 October 2010, the Pennsylvania Office of Disciplinary Counsel filed a Petition for Discipline against Litman, alleging professional misconduct for pursuing frivolous and unwarranted legal remedies, engaging in a pattern of deliberate misrepresentation, and failing to represent competently his client, Hanoverian, in the federal litigation and administrative proceedings concerning the landfill permit.

A Joint Stipulation of Fact and Law was submitted by the parties. Litman acknowledged that his filings before the federal court violated the Pennsylvania Rules of Professional Conduct, but quixotically did not acknowledge that he did not have a basis to resurrect the same claims in the administrative proceedings before the Board. The Disciplinary Board of the Supreme Court of Pennsylvania found that Litman violated Rules 1.1, 3.3(a)(3), and 8.4(c) and (d) of the Pennsylvania Rules of Professional Conduct. 6 ²¹⁴ The Board found also that Litman’s cooperation with the investigation and genuine remorse for his actions were mitigating factors. It recommended that Litman be subject to a Public Censure before the Supreme Court of Pennsylvania.

The Pennsylvania Supreme Court summarized Litman’s violations of its Rules of Professional Conduct and censured him before the Court on 27 November 2012. The Attorney Grievance Commission of Maryland, through Bar Counsel, contends that Litman should be disbarred in Maryland for violating Rules 1.1, 1.16(a)(1), 3.1, 3.3(a), and 8.4(a), (c) and (d) of the Maryland Lawyers’ Rules of Professional Conduct (“MLRPC”) in his representation of Hanoverian. 7 Litman does not deny Bar Counsel’s allegations of ²¹⁵ misconduct, but rather argues that disbarment is not the appropriate sanction and highlights the mitigating factors found by the Disciplinary Board of the Supreme Court of Pennsylvania. He pleads also that the consequences of the Pennsylvania public censure have been sanction enough for his misconduct. The only factual disagreement pointed to by Litman is whether his misrepresentations were to further a scheme.

It is obvious to us, however, that Litman’s intentional misrepresentations were to further his client’s interests and thus were placed before tribunals to achieve a particular goal for the client. Further, Litman does not deny that his tactics were calculated to delay the then pending proceedings in Pennsylvania.

II

Discussion Although this Court is prone to imposing a corresponding sanction to that levied by the originating jurisdiction, that does not mean we forego an assessment of the propriety of the other jurisdiction’s sanction. Atty. Griev. Comm’n v. Whitehead, 390 Md. 663, 668-69 , 890 A.2d 751, 754 (2006).

When our cases indicate clearly we would apply a different sanction had the misconduct occurred in Maryland, we need not issue corresponding discipline, even if such exists under Maryland’s ²¹⁶ sanctions hierarchy. Kourtesis, 437 Md. at 447 , 87 A.3d at 1237 . Our obligation to assess the sanction imposed by another jurisdiction stems from this Court’s duty “ ‘to insist upon the maintenance of the integrity of the bar....’” Atty. Griev.

Comm’n v. Myers, 333 Md. 440, 447 , 635 A.2d 1315, 1318 (1994) (quoting Maryland St. Bar Ass’n v. Agnew, 271 Md. 543, 549 , 318 A.2d 811, 814 (1974)). “The primary purpose of attorney discipline is the protection of the public, not the punishment of the attorney.” Whitehead, 390 Md. at 674 , 890 A.2d at 757 . Consistent sanctions against Maryland-licensed attorneys for like misconduct promotes general and specific deterrence by indicating the standards members of the bar must adhere to and the consequences for failing to do so. See Kourtesis, 437 Md. at 447 , 87 A.3d at 1237 ; Whitehead, 390 Md. at 675 , 890 A.2d at 758 ; Atty. Griev.

Comm’n v. Sperling, 380 Md. 180, 190-91 , 844 A.2d 397, 404 (2004). The parties argue that this Court should impose different discipline here than did the Supreme Court of Pennsylvania. 8 Bar Counsel seeks disbarment of Respondent because it believes Litman’s conduct warrants substantially different discipline in Maryland under certain of our like cases. Respondent, in turn, argues that no further discipline is required because the public censure of the Supreme Court of Pennsylvania has shamed and admonished him adequately and its consequences resulted in limiting adversely his practice and employment options since then. According to Litman’s view, additional discipline in Maryland would be, in effect, piling-on. ²¹⁷ A. The Appropriate Sanction in Maryland is an Indefinite Suspension Respondent misrepresented intentionally facts and the law to both judicial and administrative tribunals, demonstrated a lack of diligent research, failed to represent competently his client, and employed frivolous arguments and filings in an effort to interfere with the administration of justice.

This constitutes a violation of MLRPC 1.1, 3.3(a), and 8.4(c) and (d). Even if, as Litman claims, his representation of Hanoverian was an aberration in an otherwise competent and ethical legal career to that point, he engaged in the same course of conduct twice in his representation of Hanoverian: once before the federal court and again before the Pennsylvania Environmental Hearing Board. Further, Litman was made aware of the error of his way by the DEP, but took no measures to remedy the situation. He either made deliberately the misrepresentations at issue or blinded himself willfully to the falsity of his