Posted in April 2012 …

Apr 22 2012
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ABA Model Rules, CLE, Client Funds, Ethics & Professionalism, Ethics Codes, Malpractice

No Such Thing as a Non-Refundable Retainer?

By Jason Castillo, Director of Legal Education

The Iowa Supreme Court recently suspended a retired Iowa attorney for 30 days after ruling that a fee agreement with a criminal defendant was unethical.  According to the opinion, “the amount of the fee charged and collected by Vilmont for performing the limited and insignificant services in representing his client was, without question, unreasonable.”  The court then stated that a reasonable fee would have been about $600 under the circumstances of the case.  To read the opinion, click here.

The charges arose from attorney Bill Vilmont’s representation of a client on a state charge of enticement of a minor.  According to the Iowa Supreme Court opinion, the agreement provided for charges of $225 an hour, with a minimum fee of $2,500 to be paid with a retainer.  The $2,500 retainer was placed in a trust.

When the state charges were dropped in leiu of federal charges, the client dropped Vilmont and retained a different attorney to represent him in federal court, according to court documents.  Five days after the state charge was dismissed, Vilmont withdrew the $2,500 from the trust account without notifying his former client, according to the opinion.  Vilmont then ignored several requests to return the retainer.

Vilmont provided an accounting to the Iowa Supreme Court Disciplinary Board showing that he worked 3.7 hours on the client’s case – including one hour to provide the accounting.  The court, however, ruled that the minimum fee contract was “clearly unethical” and that Vilmont had failed to provide a timely accounting.

After scanning some of the comments on the ABA website, it’s clear that a number of attorneys did not agree with the Iowa Supreme Court ruling.  However, in the words of attorney fee expert James King, there is no such thing as a non-refundable retainer.  All unearned fees must be returned to the client.[1]  Under California Rule 3-700(D)(2), unless the attorney and client have contracted for a “true retainer,” the attorney must refund any portion of an advance fee that the attorney has not yet earned.[2]

And an examination of authority reveals that only “true retainers” are nonrefundable – and these are extremely rare.  When a client discharges an attorney, the Rules of Professional Conduct require the attorney to “[p]romptly refund any part of a fee paid in advance that has not been earned.”[3]  In California and other states there are also Ethics Opinions that address the subject.

What are your thoughts?

For more information, we have a few resources available for you:

[1] Baranowski v. State Bar (1979) 24 Cal.3d 153.

[2] The California Rules also state that a refund is unnecessary if the money is “a true retainer fee … paid solely for the purpose of ensuring the availability of the member for the matter” (see Rule 3-700(D)(2).  However, in the words of the California Supreme Court, true retainers are very rare these days.

[3] See California Ethics Opinion 01-02 which speculates that there are probably only a handful of situations in which a client would want to pay a true retainer.

Apr 16 2012
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Employment Law, Facebook, Law & Technology, Privacy, Social Media, Twitter

Will Other States Follow Maryland in Protecting Online Privacy?

By Jason Castillo, Director of Legal Education

Privacy in the digital age – what does it mean to you?

Does it mean that potential employers should be able to ask for your Facebook username and password at a job interview?  Why not just ask for the keys to your house and your smartphone?

It’s no secret that many of us live our lives online.  Now, some employers want access to prospective employee’s online lives.  And they are requiring access to applicant’s Facebook, Twitter and other social media accounts in order to be considered for the job.  Employers are either asking for the login information or simply asking applicants to log into their accounts right in the middle of the interview.[1]

At the college level, student-athletes across the country also have also had similar intrusions into their privacy.  Schools have begun requiring student-athletes to ‘friend’ a coach or compliance officer, which gives the school access to their Facebook posts and profile.  Social media monitoring companies have also begun to pop up.  Companies like UDilligence, Centrix Social and Varsity Monitor offer software packages that automate the task for colleges and univeristies.[3]

Luckily, there were some lawmakers that were paying attention to this trend.  Maryland’s House and Senate recently passed legislation that would prohibit employers from asking for a current or potential employee’s login information to Facebook, Twitter and other social media websites.  In the long run, this legislation could potentially save Maryland businesses quite a bit of money.  According to Maryland attorney Bradley Shear, the Bill prevents businesses from having to spend thousand of dollars on social media monitoring companies to review their employees’ password protected digital content.[4]

“I encourage everyone who reads this to reach out to Maryland’s legislators to voice support for these bills and to lobby your state legislatures to pass similar legislation. These bills are a win for employers, employees, and taxpayers.”[2]

When Maryland Governor Martin O’Malley signs Senate Bill 434 and into law, Maryland will become the first state in the nation to pass legislation protecting employees from having employers access their social media accounts.[5]  Illinois, Minnesota, New Jersey, Washington, Massachusetts and California are also considering similar legislation.

Hopefully, now that Maryland has taken action other states will soon follow suit.

[1] See: Govt. agencies, colleges demand applicants’ Facebook passwords

http://redtape.msnbc.msn.com/_news/2012/03/06/10585353-govt-agencies-colleges-demand-applicants-facebook-passwords

[2] Bradley Shear, Maryland Legislation Would Protect Employee and Job Applicant Social Media Privacy Rights

http://www.shearsocialmedia.com/2012/03/maryland-legislation-would-protect.html

[3] The programs offer a “reputation scoreboard” to coaches and send “threat level” warnings about individual athletes to compliance officers.

[4] Maryland: The First State To Protect our Social Media Privacy and Security

http://www.shearsocialmedia.com/2012/

[5] Senate Bill 433 protects students from online privacy intrusions.

Apr 04 2012
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Facebook, First Amendment, Fourth Amendment, Jury, Law & Technology, Sixth Amendment, Social Media

Should One Facebook Post Merit a New Trial?

By Jason Castillo, Director of Legal Education

Do you think that this Facebook post violates a criminal defendant’s Constitutional right to a fair trial?  And should the juror’s Facebook postings protected under the federal Stored Communications Act (SCA)?[1]  An appellate court in California has been asked to decide these novel electronic issues.[2]

In June, 2010, shortly after the jury convicted the parties involved in a brutal gang beating in Sacramento, a juror became concerned that the jury foreman’s Facebook postings may have violated the defendant’s right to a fair trial.  She reported this conduct to the defendant’s counsel who began the process of obtaining the electronic records.  Since the defense attorneys didn’t have legal access to the juror’s Facebook page, they were forced to subpoena Facebook for the records.

Facebook then moved to quash the subpoenas and to be relieved from the court orders.  They argued that the federal Stored Communications Act (SCA) prohibited the social network from divulging the contents of petitioner’s communications.  Facebook did state, however, that the jury foreman has the discretion to turn over the electronic postings to the attorneys of the criminal defendants.  Of course the jury foreman –  A.R. – has refused to turn over the posts.

“The case involves the significant and novel issue of whether a trial court’s power to investigate a claim of juror misconduct includes the power to compel an accused juror to forfeit the protections the juror would otherwise enjoy under the federal Stored Communications Act.”

The attorney representing A.R. claims that the subpoena is a violation of his client’s First and Fourth Amendment rights to free speech and privacy.  However, A.R.’s Constitutionally protected speech and privacy rights must be weighed against a criminal defendant’s Sixth Amendment right to an impartial jury and fair trial.  Attorneys for the defendants believe that A.R.’s Facebook posts will prove that the juror was either biased or improperly contacted by outside third parties.

Should this rather innocuous electronic post rise to the level of ordering a new trial?  While it is true that A.R. did violate the court’s instruction to not share or communicate information about the trial, this does not seem like the type of conduct that would merit a new trial.[3]  The jury foreman –  A.R. – merely stated that the evidence was boring.

Now, if instead A.R. had posted on Facebook that he had done hours of outside research on Google about the crime scene and defendant, this would start encroaching into the defendant’s right to an ‘impartial’ trial. However, in the case at hand, I doubt the Court of Appeal will order the defendant to turn over the posts and the question of whether the juror’s Facebook postings are protected under the federal Stored Communications Act (SCA) will have to wait for another day.  There are two cases on point in other states where the courts issued an order compelling consent under the SCA for the disclosure of Facebook postings and text messages as part of civil discovery.[4]

What do you think?  Should the Court of Appeal order a new trial for the defendants?

[1]  Stored Communications Act (SCA) 18 U.S.C. § 2701 et seq.

[2] The case is Juror Number One (A.R.) v. Honorable Michael P. Kenny Judge of the Sacramento County Superior Court.

[3] See CALCRIM No. 101

[4] See Romano v. Steelcase Inc. (2010) 907 N.Y.S.2d 650 and Flagg v. City of Detroit (E.D.Mich. 2008) 252 F.R.D. 346.