False Fee Applications Draw Reciprocal Sanction

The New York Appellate Division for the First Judicial Department has imposed a one-year suspension and until further order as reciprocal discipline for a Maryland federal district court sanction

Respondent was counsel of record in approximately 600 “tester” cases brought under the Americans with Disabilities Act (ADA) against defendant hotels. Many of these cases were settled upon the defendants’ agreement to pay attorneys’ fees and litigation costs. Judge Stephanie A. Gallagher of the United States District Court for the District of Maryland presided over several of respondent’s cases and referred him for inquiry after becoming concerned with his candor to the court. An investigation was conducted and, thereafter, a formal disciplinary hearing was held by a three-judge panel, which found that respondent violated several provisions of the Maryland Rules of Professional Conduct (MD RPC).

Specifically, the panel found that respondent violated MD RPC 19-303. when, in his fee petitions, he misrepresented the time spent on each matter. Respondent also misrepresented his employment to justify the higher fees. He would state that ADA cases generate negative publicity, thereby hindering his ability to attract work. However, the truth was that respondent was employed as an Assistant District Attorney during that time. Respondent also lacked candor with the court when he failed to correct a witness’ testimony that respondent’s paid investigator was a friend and travel companion. The panel also found that respondent’s own lack of candor during the investigatory process constituted separate grounds for discipline under MD RPC 19303.3. Respondent gave shifting explanations for his billing practices, made contradictory statements, denied any wrongdoing and admitted that he could not stand behind the hours submitted in support of his fee petition.

Finally, the panel found that respondent violated MD RPC 10-303.4 and 19-304.1 when he misled opposing counsel to believe that his clients incurred attorneys’ fees and costs. The clients did not incur such fees and costs because respondent had a side agreement with the clients that such fees and costs would never be collected. Further, the attorneys’-fee demands bore no resemblance to time actually spent on the case and his timesheets were unreliable and inflated. Respondent also presented settlement options to opposing counsel that included “future work,” which, respondent admitted, he never actually performed.

Sanction

The severity of respondent’s misconduct warrants a one-year suspension. Respondent handled hundreds of ADA tester cases in which he repeatedly submitted false fee applications to the Maryland and other federal courts in which he inflated the amount of work he had performed. In addition, respondent repeatedly made false statements in settlement negotiations with opposing counsel by representing that his clients were entitled to compensation via payments representing attorneys’ fees for which they would otherwise be responsible when such was not the case. Also, as noted, respondent failed to correct materially inaccurate testimony given by his client to the court in one of the ADA cases.

(Mike Frisch)