Legal Ethics

Attorney With LA Firm Fined $102K—Plus 200 Pro Bono Hours

NOTE: The sanctions described here against Deborah Klar, Teri Pham and the law firm Liner Grode Stein Yankelevitz Sunshine Regenstreif & Taylor were vacated, in effect, in April 2010 by U.S. District Judge Philip M. Pro.

A federal magistrate judge in Nevada has not only fined an attorney formerly with a Los Angeles-based firm $102,205, but in a perhaps-unprecedented penalty is requiring her to perform 200 hours of pro bono work. The penalties are part of a group of sanctions against Liner Grode Stein Yankelevitz Sunshine Regenstreif & Taylor and one present and one past lawyer there, in what the court’s opinion describes as a trade secrets case “suffused with bad faith.”

Hit hardest was ex-Liner Grode lawyer Deborah Klar, who received both the six-figure fine and the heftiest pro bono penalty, reports the Recorder. Magistrate Judge Valerie Cooke of Nevada District Court also fined the firm and a lawyer who still works there, Teri Pham, $20,000 and $20,441, respectively, and Pham was ordered to perform 100 hours of pro bono work. (The client, an individual inventor and software developer in litigation with a former business partner, was sanctioned, too.)

The sanctions stem from what Cooke describes, in a 54-page ruling, as conduct by the firm and both attorneys that was “willfully reckless, intended to harass, done for an improper purpose, and was suffused with bad faith,” the legal publication recounts. Specifically, Cooke contends, the two lawyers, in an effort to make it impossible for the client’s former attorney to collect alleged unpaid legal fees, sought to remove the case from her court’s jurisdiction and make it too expensive for the former attorney to pursue them.

The order is stayed until Friday to give the parties a chance to contest it.

Stuart Liner, the law firm’s managing partner, is “extremely disappointed and surprised” by the judge’s decision and says Liner Grode will object.

Klar declined to comment when contacted by the Recorder, and Pham did not return a phone call Friday from the legal publication.

California attorney Jerome Fishkin, who specializes in legal ethics, says he has never before seen a judge use pro bono work as a sanction, the Recorder reports. Cooke’s opinion calls for the two sanctioned lawyers to present a pro bono plan before they begin work.

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