Misconduct Found

The Florida Supreme Court overruled a referee’s findings of no violations and returned the case to the referee for a sanction hearing

The Florida Bar seeks review of a referee’s report recommending that Respondent, Charlie Easa Farah, Jr., be found not guilty of violating the Rules Regulating The Florida Bar for his involvement in the filing of thousands of meritless Engle-progeny claims in state and federal court. The Bar argues that the record before us clearly supports a finding that Farah is guilty of each of the charged rule violations, as well as of violating rules 4-1.5(f)(2) and 4-1.5(f)(4)(D)(iii), and it urges us to impose a 30-day suspension in this matter.

We agree with the Bar in part and disapprove the referee’s not guilty recommendation as to rules 4-1.3, 4-1.4(a), and 4-1.16(a)(1). We instead find Farah guilty of violating each of those rules. We also find Farah guilty of violating rule 4-1.5(f)(2). However, instead of sanctioning Farah at this time as requested by the Bar, we refer this case back to the referee to hold a hearing and provide a recommendation as to the appropriate sanction.

Where there’s smoke there’s lawyers

Back in 2006, the Court approved the decertification of the Engle class action group. See Engle, 945 So. 2d at 1277. Former members of the class, which consisted of smokers and their survivors, were given one year from this Court’s mandate—until January 11, 20083—to file individualized claims in which certain findings would receive res judicata effect. Id.

Farah became involved in tobacco litigation around the same time the Engle class was decertified. He initially represented 163 Engle plaintiffs. He later associated with Norwood Sherman Wilner, a Jacksonville-based lawyer with experience in tobacco litigation, and the two agreed to share the labor and expense required to prosecute additional Engle-progeny cases. Specifically, the two agreed that Wilner would file cases and conduct trials and discovery, while Farah would provide personnel support and financial backing.

Before the January 11, 2008, deadline expired, Wilner filed more than 3,000 Engle cases in state and federal court. The lawsuits alleged various claims related to cigarette smoking, such as personal injury and wrongful death, and were filed on behalf of 4,432 plaintiffs, including the 163 plaintiffs originated by Farah’s firm. Farah’s name was listed in the signature block of each complaint filed by Wilner.

The federal claims were filed in the United States District Court for the Middle District of Florida. The Middle District stayed the cases until October 2010, at which point Wilner voluntarily dismissed 499 cases (a little more than 10% of the cases filed). The Middle District then ordered plaintiffs’ counsel to review the remaining cases to determine whether any other cases were non-viable and should therefore be dismissed. In March 2011, Wilner certified that each pending case had been reviewed and recommended the dismissal of 254 additional cases, meaning more than 2,900 cases were still pending. Despite Wilner’s certification, the Middle District went on to dismiss hundreds more Engle cases throughout 2012 and 2013.

The Engle cases were eventually whittled down nearly 90% to just 415 plaintiffs, all with whom the tobacco companies settled in 2015. Given the large number of cases that were ultimately dismissed as non-viable, that same year, the Middle District appointed a special master to investigate whether Wilner and Farah’s conduct warranted sanctions. The special master submitted a report finding that Wilner and Farah violated Federal Rule of Civil Procedure 11,4 28 U.S.C. § 1927,5 the Middle District’s local rules, and the Florida Rules of Professional Conduct. In 2017, after holding a sanctions hearing, the Middle District entered a detailed order finding Wilner and Farah violated their professional obligations by failing to inform themselves of the facts of their clients’ cases. The Middle District reprimanded both lawyers and required them to pay $9,164,404.12 as a sanction. In re Engle Cases, 283 F. Supp. 3d 1174, 1259 (M.D. Fla. 2017). That amount was later reduced to $4,329,668.43, and Wilner and Farah each paid half.

Based on this conduct, the Bar charged Farah with violating rules 4-1.3 (Diligence), 4-1.4(a) (Communication), and 4-1.16 (Declining or Terminating Representation). The Bar’s complaint was referred to a referee, who held a hearing and filed a report recommending that Farah be found not guilty of the charged rule violations. The referee found that the Bar improperly based its case on the special master’s report and investigatory materials and did not conduct its own investigation into Farah’s conduct.

The Bar filed a notice of intent to seek review of the referee’s report. It challenges the referee’s recommendation that Farah be found not guilty of the charged rule violations. It also argues that Farah should be found guilty of two additional rule violations and that he should be suspended from the practice of law for 30 days.

Referee error

We begin our review of the referee’s report by first addressing the referee’s finding that the Bar failed to conduct its own investigation into Farah’s conduct and instead improperly based its case on the federal court’s sanction order and the special master’s report. The report and sanction order are the product of an extensive seven-month investigation. The report is nearly 300 pages in length and includes numerous exhibits. The federal court’s sanction order is equally comprehensive. It details at great length how Wilner and Farah recklessly initiated thousands of meritless Engle-progeny cases, and how their actions greatly burdened the federal court.

Nothing in our rules or case law requires that the Bar essentially duplicate the work of the special master and federal court by conducting its own extensive investigation into Farah’s conduct during the Engle litigation. Furthermore, the federal court’s order and the special master’s report were both admissible in the proceedings before the referee as evidence of Farah’s conduct.

The court overruled the referee

Having found Farah guilty of violating rules 4-1.3, 4-1.4(a), 4-1.16(a)(1), and 4-1.5(f)(2), we now consider the appropriate  disciplinary sanction for his misconduct. The Bar urges us to suspend Farah from the practice of law for 30 days. However, the referee did not conduct a sanction hearing in this matter, and “due process requires that [an] attorney be permitted to ‘explain the circumstances of the alleged offense and to offer testimony in mitigation of any penalty to be imposed.’ ” Fla. Bar v. Carricarte, 733 So. 2d 975, 979 (Fla. 1999) (quoting Fla. Bar v. Cruz, 490 So. 2d 48, 49 (Fla. 1986)). We, therefore, find the record insufficient to determine the appropriate sanction and refer this case back to the referee to conduct a sanctions hearing.

(Mike Frisch)