Regulatory Capture at the Oregon State Bar
**NOTE: The OSB Board of Governors website/links were removed since publishing and I recently replaced them with the same documents uploaded to DocumentCloud. **
Oregon is currently one of a handful of states in which an attorney can resign while under investigation for professional misconduct. This type of resignation, called a “Form B Resignation,” allows an attorney to skate away from further scrutiny without any admission of the truth of the allegations being investigated.
A Form B is usually taken in a case in which the attorney knows that the Oregon State Bar (OSB) — specifically the Discipline Counsel’s Office (DCO) — can prove the case against them, and that it would be a waste of their time, energy, and finances to fight it.
Attorneys who choose to resign in this manner are not eligible for reinstatement ever, even if there is a rule change in the future. They are effectively and permanently disbarred.
Now, disbarment is truly the ultimate punishment that can befall an attorney, and, more importantly, the only type of punishment that the OSB — a licensing and regulatory agency — is in charge of doling out, save for suspensions and lesser sanctions. Losing one’s license is, after all, a huge flushing-down-the-toilet of a lawyer’s legal education and reputation, assuming they actually had one.
In 2014, having been invited by the Oregon Supreme Court to do so, the American Bar Association (ABA) conducted a study of the state’s lawyer discipline system. In early 2015, they released their 105-page report, which included nineteen specific recommendations.
Eighteen of those recommendations had the tone of an HR team-building exercise. But one, the most strongly worded of them all, recommended that the Court¹ should “eliminate the option of resigning with investigations or formal proceedings pending” — i.e. a Form B — stating that a “lawyer who commits misconduct serious enough to warrant disbarment should not be allowed to claim later that he or she voluntarily resigned his or her license to practice law.”
The ABA further stated that an attorney “should be required to admit” the allegations against them, “so that evidence of guilt will be available” if the lawyer suddenly decides to claim at a later date that they weren’t guilty and they want their license back. At that time, “it may be difficult” for the bar “to establish misconduct because relevant evidence and witnesses may no longer be available.”
Just as important, and not acknowledged in this report, is the fact that actual litigants — the public that is ostensibly being protected by these rules — need that admission of guilt as well. And often, they need it immediately.
Currently, the flawed Form B option hurts litigants and the public. Disturbingly, there are those who were assigned with fixing it that sought to make it even worse.
The road to hell…
In anticipation of the ABA’s report, the Bar president appointed a Discipline System Review Committee (DSRC). The 27-person committee was chaired by Mark Johnson Roberts, the bar’s Deputy General Counsel, and included one prominent Portland attorney at his own urging, Barnes H. Ellis, who was at that time the subject of his own disciplinary investigation.
Curiously absent from the roster of the DSRC were any members of the actual public, who had at least as much at stake in the process as Oregon attorneys did, and arguably had more interest in terms of accountability, fairness, and transparency.
Despite leaving out the public, the DSRC soldiered forth, and at their first meeting, Johnson Roberts provided the team with their mission and some background on it. The brief minutes from this meeting refer twice to “stakeholders” in the OSB’s disciplinary system, which Johnson Roberts presumably knew included actual complainants — i.e. the public — that the ABA had interviewed while conducting their study.
Another sentence fragment from the minutes implied that the DSRC was interested in garnering “input from the stakeholders” regarding the proposed changes — again, presumably, that would include feedback from the public.
Things immediately took a turn
The DSRC received the ABA report in January. At their second meeting, later that month, Johnson Roberts suggested that each of the ABA’s nineteen recommendations “be addressed briefly and identified as to whether it was a ‘no-go,’ ‘good idea, no discussion needed,’ or ‘discuss.’” Anything in need of discussion was to be rated in terms of difficulty.
Thoughtful and presumably lively discussion ensued!
Then the DSRC arrived at the ABA’s recommendation #18: that Form B resignations be completely eliminated.
The minutes state that this was an “easy” one for the DSRC, because “there is no support for this idea, although it may be a good idea to change the name to something that reflects the ‘charges pending’ aspect.”
Great. Because rebranding something totally defective absolutely solves everything. And ignoring the strong recommendation of a positively-intentioned, Supreme-Court-invited overseeing agency like the ABA is totally an awesome idea.
As meeting followed meeting regarding the ABA report, the DSRC took another bad step, on February 23rd, when Johnson Roberts “presented the issue” of a complainant’s right to appeal a complaint dismissed by the DCO to the State Professional Responsibility Board (SPRB). Importantly, the SPRB includes members of the public.
It was then noted by Dawn Evans, current Director of Regulatory Services, in a breathtaking admission, that requests for review of dismissed complaints “have declined by more than half since we stopped informing complainants of the opportunity for SPRB review.” Why yes, that certainly would make those numbers go down!
A few months later, at the meeting of April 25th, there was even more discussion of the matter of appeals of dismissed complaints. Trenchant points were raised, such as “seems unnecessary” and “there is not a need for further review after both CAO and DCO have evaluated a matter.” For good measure, a committee member even suggested that the group “consider a different term than ‘dismissal.’” Because this looks like a job for euphemisms!
At this point, as I reviewed the meeting minutes in sequence, it was beginning to seem as though these assembled attorneys felt strongly that the entire process was excessively fair and overly generous towards complainants (those allegedly protected by regulation), and burdensome and punishing towards lawyers (those allegedly being regulated).
The minutes from the next few meetings did nothing to assuage my concerns. Indeed, the minutes felt like HOURS.
In May, despite knowing that the ABA preferred that the DCO operate under the Court, “separate from the OSB,” there was no motion made to change the “current structure for employment, supervision and budgeting in Discipline Counsel’s Office.”
In June, the DSRC broke out a smaller workgroup, trying to amend Oregon’s public records law to exempt complaints from disclosure until they are authorized for prosecution. The reason was to protect lawyers from “reputational harm” due to “frivolous complaints.”
In August, the work of the above “Public Records Subcommittee” was ratified by the larger committee, unanimously.
Then the DSRC asked the ABA to hold its beer
The climax to RegulatoryCaptureFest 2015 came on October 26th, when the DSRC circled back to the ABA’s strong recommendation to eliminate the pathway for clearly unethical attorneys to resign via Form B.
As stated, Johnson Roberts had invited the group, in January, “to offer other possible names” for the Form B, such as “Resignation with Charges Pending.” You know… for kids!²
Then — and I did NOT see this coming — the committee addressed the matter of whether Form B Resignations should even be permanent. #cokespoondrop
Arguments in support of this completely-opposite-than-recommended-thing included the concept “that more lawyers might opt for resignation in lieu of defending a charge if they had a chance to reinstate after some period of time.”
Yes! I bet they would opt for getting their license back after all the evidence and witnesses had disappeared!
After that discussion, Barnes Ellis, the prominent Portland attorney who had gotten himself appointed as a member of DSRC while he was under disciplinary investigation, then moved to allow reinstatement after a Form B Resignation.
Remarkably, his motion was even seconded.
To cap it all off, there was then a motion to “destroy records of matters dismissed by DCO or the SPRB after 3 years instead of the current 10-year retention period.” This motion was seconded by Mr. Ellis, and subsequently passed.
The DSRC then wrapped up their important regulatory work to protect the public, issued what they termed a report and recommendations in November 2015, and dispatched it to the OSB and its Board of Governors (BOG).
In their report, to address the issue of Form B Resignations, the DSRC stated that it “was not persuaded that the ABA’s concerns warrant a change in policy,” and that “the bar can do little to control how a lawyer who has resigned describes his or her departure from practice.”
Further, the report reiterated how “attractive” an option the Form B Resignation would be to attorneys if only “they were eligible for reinstatement at a later date.”
For those counting at home, that’s literally 17-bajillion extra layers of protection to the public.³
Episode IV: A New Hope
One of the committee members, Richard A. Weill, had reservations about the entire Disciplinary System Review process and wrote a minority report about his concerns in December.
In the conclusion of Weill’s searing 12-page report, he states:
“If I heard ‘protection of the public’ once during the DSRC meetings it was probably the only time. Given that the purpose of attorney discipline is to protect the public, the question that should be asked with respect to each proposal is whether it tends to increase or decrease public protection. Other concerns (the efficiency of the disciplinary process, additional due process for attorneys) are secondary.
“Too many of the proposed recommendations tend to undercut one of these three protections. The words ‘cynical’ and ‘self-serving’ describe several of the committee’s recommendations. This, then, is the ‘political influence’ that the ABA… warns poses the greatest danger to a functional disciplinary system. This too is the type of mechanism that economist George Stigler posited will almost inevitably lead to ‘regulatory capture…’”
Weill went on to single out Barnes Ellis and his “clear agenda” for having “infected the work” of the committee, causing the DRSC to go “down rabbit holes unconnected with the ABA report.”
Weill recommend that the Board of Governors “reject the committee’s report in its entirety” or “accept those of the committee’s recommendations that are not antithetical to public protection.”
Now that’s a good idea. If I was the OSB, the BOG, and the Supreme Court, I would be a little pissed about the waste of resources and time that the DSRC’s report represented — it was truly a huge FU to the ABA.
Not to mention the Oregon public.
However, I cannot find any record of these neglected disciplinary process “stakeholders” being asked for their input at any time after the report dropped.
Thankfully, there was pushback from concerned attorneys and former SPRB chairs, and the recommendations were mostly unimplemented. Notably, a Form B Resignation remains a Form B Resignation, not “Differently-Barred” or a “Legal Staycation.”
A Form B, observed in the wild…
This is where it gets both interesting and a little technical — with decidedly more consequences for the public.
In March 2018, under sixteen separate disciplinary investigations, Oregon attorney Megan M. Perry signed her Form B Resignation and submitted it to the Disciplinary Counsel Office, who accepted it and forwarded it to the Chief Justice of Oregon’s Supreme Court. When the order was signed, Perry was then effectively disbarred.
The Form B included a statement of understanding that Perry can never ever be readmitted to practice in Oregon, ever, and that even if the laws change in the future to make it possible for her to reapply for admission, her application will be treated as “by one who has been disbarred for misconduct.” Further, Perry will “not be entitled to a reconsideration or reexamination of the facts, complaints, allegations or instances of alleged misconduct” listed on her Form B.
One of the sixteen complainants happens to be my partner, Gavin F. McNett. In his (our) matter, Perry committed violations of several bar rules, including RPC 8.4(a)(4): conduct prejudicial to the administration of justice.
McNett — a litigant forced into the pro se lifestyle by a cauldron of misconduct — filed a motion for the Court of Appeals to take judicial notice of the Form B Resignation, stating that “it is a judicial fact stipulated by Ms. Perry and certified by the Oregon Supreme Court that Ms. Perry’s misconduct in case 13P2615 disrupted the workings of the trial court and prejudiced its rulings.”
Appellate Commissioner James W. Nash denied McNett’s motion to take judicial notice, stating that “the Supreme Court’s acceptance of Ms. Perry’s resignation” does not “amount to a finding that any of the allegations in the various complaints are true.”
In other words, the Form B did not serve as evidence that any misconduct occurred. Which is exactly what the ABA feared, and what they specifically urged the Oregon State Bar to address.
It is important to understand that Perry was not McNett’s attorney but the opposing attorney in his case, therefore the usual avenues of recourse against misconduct or malpractice were not available to him.
McNett was not satisfied with the Appellate Commissioner’s denial, nor the way Perry’s successor, attorney Stephanie F. Wilson, was using it as an endorsement that no conduct prejudicial to the administration of justice had occurred, and also using it as a way to preserve Perry’s tainted rulings.
McNett filed a motion to have the Appellate Commissioner’s decision reviewed by an actual appellate judge. The motion stated, “If the resignation and Supreme Court order do not create at least a presumption of misconduct and a presumption that the misconduct affected [McNett’s] case, [McNett] faces a serious risk of harm resulting from misconduct that he has no means of discovering or remedying.” McNett likened the Form B to an Alford plea by a criminal defendant.
The motion further stated that McNett “merely hopes that Oregon, like numerous other states, will recognize that a Form B resignation creates rebuttable presumptions that misconduct occurred and that it affected the cases listed in the resignation documents,” or in the alternative, that it be acknowledged that “Oregon presently has no applying case law as to how a court is to interpret a Form B resignation.”
This motion to reconsider is still under review — going on two months — by the appellate judge, and may even rise to the level of Supreme Court review, where it may be of considerable interest.
In the meantime, without any guidance from Oregon’s higher courts, and with rules that inadequately protect the public from exactly this scenario, circuit court judges are left to make unsupportable and jaw-dropping comments such as “[Perry’s] Form B resignation in itself does not prove that Judge Avera relied on anything that Ms. Perry stated or submitted.” This breathtaking statement was made by the Honorable Rafael Caso, while denying a motion to vacate Perry’s rulings.
… and that’s how sausages are made. Who’s hungry?!
Having spoken with several other victims listed on Perry’s Form B and from the way my own family’s experience parallels theirs: It would be in the interest of justice for a higher court to intervene in this madness.
By ignoring the American Bar Association’s strong recommendations and even trying to roll back the protections already in place, the Oregon State Bar has contributed to the madness, and is acting against the public interest. Indeed, the OSB seems to be roller-skating on the precipice of regulatory capture.
¹ The Supreme Court is in charge of the OSB’s by-laws governing the discipline of attorneys.
² Hudsucker Proxy reference for everyone!
³ It is not literally 17 bajillion layers of protection to the public, but negative-eleventy godzillian.