Dunn Not Done: California Bar Saga Continues

Law360 reports

The former California state bar director who alleged that he was fired for exposing the organization’s ethical violations can pursue his claims that the bar and some of its leadership retaliated against him and wrongfully fired him, an arbitrator ruled on Friday.

JAMS arbitrator Edward A. Infante found on Friday that Joe Dunn, the State Bar of California‘s former executive director, can move forward with three claims related to his employment contract, including one allegation that he was retaliated against after digging up evidence that the chief trial counsel Jayne Kim was editing records to clear a backlog of disciplinary cases.

Infante, a former chief magistrate judge of the U.S. District Court in the Northern District of California, also allowed claims related to Dunn’s firing to continue against the bar’s president, Craig Holden. Dunn had sufficiently bolstered his accusation that Holden acted outside his role at the bar to attack the former state senator-turned-executive director, according to the decision.

Because those claims were sufficiently alleged at this stage, the arbitrator can’t decide them on their merits at this point, Infante found. “Based on the facts alleged in the [amended notice of claims], the arbitrator cannot determine, as a matter of law, that Mr. Holden was acting within the scope of his authority when he engaged in the alleged conduct,” he wrote.

Dunn’s amended notice of claims included violations of the state labor code, breach of fiduciary duty, intentional interference with contractual relations and breach of implied covenant of good faith and fair dealing.

Infante shot down for the fourth and last time Dunn’s claim that the bar had breached its fiduciary duty in firing him, without granting him permission to amend it, according to filings in the case. 

Along with seven unnamed whistleblowers, Dunn had sued the bar in November 2014 alleging that its chief trial counsel, Jayne Kim, purged the public disciplinary case backlog to inflate her productivity and failed to actively prosecute unlicensed lawyers preying on immigrants after the state Legislature passed a bill  creating new criminal punishments for the practice. Kim said in late April that she would resign, though the bar trustees had voted to approve her for a second term.

Dunn also claimed that bar President Craig Holden, a partner at Lewis Brisbois Bisgaard & Smith LLP, targeted Dunn and others for speaking out.

An amended complaint included new allegations that Beth Jay, a retired principal counsel to the chief justice of the California Supreme Court, had “intentionally interfered with Senator Dunn’s employment at the state bar.”

A California judge determined a year ago that the dispute fell “squarely” within the scope of Dunn’s employment agreement and granted a defense motion to compel arbitration. During the arbitration proceedings, the bar and Holden filed a demurrer seeking a dismissal of the suit, which they called retaliation for justified termination.

In April, Infante rejected Dunn’s case but permitted the former state senator to rewrite some of the claims to meet pleading standards, according to that decision.

Moez Kaba of Hueston Hennigan LLP, who represents the bar, noted that Dunn’s allegations must be accepted as true at this stage, even if there’s no evidence to support them.

“Even under this standard, the arbitrator narrowed the case by granting the demurrer with respect to Mr. Dunn’s breach of fiduciary duty claim,” Kaba said. “With respect to Mr. Dunn’s remaining claims, when the facts are presented to the arbitrator, either at summary judgment or trial, we are confident that the bar and Mr. Holden will succeed.”

The current president of the state bar, David J. Pasternak, said in a statement that his organization appreciated the arbitrator’s decision to narrow the case.

“As for the remaining claims, we remain confident, as we have been all along, that we will prevail when all of the facts are made known through the discovery process,”

Pasternak said. “In the meantime, we will continue focusing our efforts and energies on public protection.”

Attorneys for Dunn did not immediately respond to requests for comment on Monday.

Dunn and the unnamed whistleblowers are represented by Mark J. Geragos and Ben J. Meiselas of Geragos & Geragos PLC.

The bar and Holden are represented by John Hueston, Moez Kaba, Joe Reiter and Stanley Chen of Hueston Hennigan LLP.

The arbitration is Dunn v. State Bar of California et al., case number 1100083130, before JAMS Arbitration.

(Mike Frisch)