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In Re Discipline of Schaefer
Citations: 25 P.3d 191; 117 Nev. 496; 117 Nev. Adv. Rep. 44; 2001 Nev. LEXIS 44Docket: 36173
Court: Nevada Supreme Court; June 21, 2001; Nevada; State Supreme Court
Two formal disciplinary complaints were consolidated against attorney John Michael Schaefer, revealing multiple violations of professional conduct rules. The complaints, adjudicated by the Southern Nevada Disciplinary Board, highlighted a breach of Supreme Court Rule 182, which prohibits lawyers from directly contacting represented parties without the consent of their counsel. Schaefer argued that this rule did not apply to his self-representation. The court opined that while SCR 182 should apply to attorneys representing themselves, the rule was unconstitutionally vague regarding its application to Schaefer's conduct at the time. As a result, violations tied to his self-representation were not considered in the disciplinary outcome. The first complaint included three counts against Schaefer, citing violations of various rules related to competence, candor, fairness, and misconduct involving dishonesty. These counts stemmed from Schaefer's contentious relationship with his condominium association, stemming from disputes that escalated to the point of affecting the marketability of other units. The initial litigation began in March 1997 when Schaefer, representing Schaefer, Inc., sought a court order to preserve his voting rights within the Association, which was granted. However, Schaefer improperly included a cost award in the order, contrary to the court’s stipulation, and submitted it without the required approval from opposing counsel. The court ultimately found substantial evidence for the remaining violations and deemed disbarment appropriate due to Schaefer's overall conduct. The court mistakenly issued an order that included a cost award. Upon its discovery, opposing counsel requested Schaefer to agree to an amended order that removed the cost award, which Schaefer refused, prompting opposing counsel to file a motion to amend the order, ultimately granted by the court. In April 1997, Schaefer initiated legal action against the Association and its board members, claiming they conspired to have another resident assault him. Shortly after, he faced five misdemeanor battery charges, with one victim being Mrs. Fox, spouse of an Association board member, and another being the resident involved in the alleged conspiracy. Schaefer was convicted of two counts of misdemeanor battery, followed by extensive post-trial proceedings. During the criminal proceedings, a verbal 'no-contact' order was imposed, barring Schaefer from contacting Mrs. Fox. Despite this order, Schaefer visited the Fox residence on March 9, 1998, where he handed a letter to Mrs. Fox, proposing to dismiss Mr. Fox from the conspiracy case in exchange for cooperation in the criminal case. He also left a business card with a note on the Foxes' car. During subsequent disciplinary hearings, Schaefer acknowledged his awareness of the no-contact order and Mr. Fox’s legal representation. Additionally, in August 1997, Schaefer filed a complaint seeking a receivership for the Association, including a family trust as a plaintiff without the trustee's knowledge or consent, as she was abroad at the time. Upon her return, the trustee expressed her discontent with Schaefer's actions, emphasizing that a receivership was detrimental to the trust's interests. Schaefer attempted to persuade her to retroactively authorize the lawsuit, but she refused and informed the Association's attorney that he was not authorized to represent the trust. Schaefer admitted at the disciplinary hearing that he did not consult the trustee prior to filing and improperly initiated the legal action on her behalf. He also communicated with six board members to solicit their support for the receivership complaint, despite knowing the Association had legal representation. The action was dismissed, and Schaefer faced a $5,000 sanction for filing a frivolous complaint. Over two years after a disciplinary hearing, Schaefer had not paid the imposed sanctions. He engaged in negotiations for a global settlement of ongoing litigation, excluding his conspiracy action, which was managed by the Association's insurance defense counsel. During these negotiations, he directed communications to the Association's president, attempting to coerce him into dismissing counsel, despite knowing the Association was represented. Schaefer sought to substitute himself as counsel for the Association while representing an opposing party (Schaefer, Inc.), causing distress to the president and fear to his wife when communications were left under their door late at night. He also contacted board members regarding the settlement without counsel’s consent. Schaefer admitted to these actions in his written submissions and testimony before the hearing panel. Count II of the first complaint addressed Schaefer's failure to disclose his disciplinary history in a pro hac vice application to a Texas court, where he sought to represent a trust. In his November 1998 affidavit, he inaccurately claimed no discipline had occurred in the previous five years, omitting a public reprimand from December 1992, and failing to disclose a reprimand in California in 1993 and a subsequent suspension in 1997, both of which warranted reciprocal discipline. The panel found violations of SCR 172 (candor toward the tribunal), SCR 203(3) (misconduct involving dishonesty), and SCR 203(4) (conduct prejudicial to justice). A second disciplinary complaint followed the first, alleging violations of SCR 151 (competence), SCR 172 (candor), SCR 182 (communication with someone represented by counsel), SCR 197 (communication with prospective clients), and SCR 203(4). This complaint stemmed from Schaefer's conduct during litigation against Mirage Resorts, Inc. Despite being instructed to direct all communications through the general counsel, Schaefer sent letters to various representatives of Mirage, referencing the pending cases and his ownership of Mirage stock. The panel determined that Schaefer violated SCR 182 by communicating directly with Mirage's officers, directors, and employees about the litigation. Two disciplinary complaints against Schaefer were consolidated for a formal hearing by the Southern Nevada Disciplinary Board. In June 1999, Schaefer and the state bar agreed to schedule the hearing for November 17, 1999, with formal notice served to Schaefer on October 13, 1999. Schaefer requested a continuance on October 23, citing his campaign for public office as a reason for inadequate preparation, but the motion was denied on November 5. Settlement discussions took place the day before the hearing, leading to a conditional guilty plea agreement, which Schaefer later refused without clarification on specific rules regarding representation. His counsel withdrew, and as no witnesses were present, the hearing was continued. Schaefer was advised to obtain new counsel, and a continued hearing was set for January 4, 2000, with notice served on November 30, 1999. Schaefer's subsequent motion for another continuance was denied on December 23, 1999. Following the hearing and submission of post-trial briefs, the panel found multiple violations of professional conduct rules against Schaefer, including violations related to meritorious claims, fairness to opposing parties, communication with represented individuals, and misconduct reflecting dishonesty. Specific violations included SCR 170, SCR 173(3), SCR 173(6), SCR 182, SCR 203(1), SCR 203(2), SCR 203(3), SCR 203(4), and SCR 172, among others, across various cases including litigation with the Association and the Texas case. The panel determined that Schaefer's conduct involved aggravating factors, including a pattern of misconduct, multiple offenses, and a refusal to acknowledge wrongdoing, leading to a recommendation for disbarment. Key legal issues include the applicability of SCR 182, which prohibits lawyers from directly contacting represented parties, to lawyers appearing pro se. The determination involves whether a lawyer representing himself can contact another represented party and if a corporate principal litigating on behalf of the corporation qualifies as appearing pro se. SCR 182 aims to prevent lawyers from exploiting laypersons and to maintain the integrity of the attorney-client relationship, while also safeguarding privileged information. Schaefer contends that the rule does not apply to lawyers representing themselves, citing support from ABA Model Rule 4.2 commentary and case law from other jurisdictions. However, the majority of courts assert that the rule's protective purposes remain relevant even when the lawyer is pro se. The state bar's Standing Committee on Ethics supports this view, concluding in a 1988 opinion that SCR 182 applies to pro se lawyers. Additionally, Schaefer argues that he can represent his corporation, Schaefer, Inc., under SCR 44 and SCR 2(8), which defines "person" to include corporations. This raises questions about whether the rule's restrictions apply to his dual role as an individual and corporate principal. Schaefer asserts that he does not represent a separate 'client,' claiming that the rules do not apply to him. It is established that a corporation must be represented by counsel and that non-lawyer principals cannot represent such entities. A lawyer representing a corporation does so in their capacity as a lawyer, not as a principal. Therefore, SCR 182 applies to these circumstances. Schaefer's claim that SCR 182 is void for vagueness is rejected based on prior rulings. He further argues that his communications with Mirage Resorts employees were permissible due to his status as a shareholder, contending that SCR 182 only restricts communication regarding litigation subjects. However, while some correspondence addresses shareholder issues, many letters also pertain to the ongoing litigation, thus falling within the scope of SCR 182. Regarding the constitutionality of SCR 182, Schaefer argues that it imposes a content-based restriction on speech, requiring strict scrutiny to be valid. This argument is dismissed as lacking support and merit. The Supreme Court's ruling in Gentile v. State Bar of Nevada indicates that a lawyer's speech during pending cases can be more heavily regulated than that of the press. The distinction between content-based and content-neutral regulations is clarified, concluding that SCR 182 is content neutral. As a content-neutral restriction, SCR 182 is constitutional if it serves a legitimate government interest and the speech restriction is not overly broad. It is determined that SCR 182 is valid as it governs the legal profession, protects attorney-client relationships, and does not unnecessarily limit speech; lawyers can still communicate with represented persons if authorized by law or with consent from opposing counsel. Schaefer contends that SCR 182 is unconstitutionally vague as applied to him while representing himself or Schaefer, Inc., arguing that the rule does not clearly define prohibited conduct. He interprets the phrase "in representing a client" as implying that a self-represented lawyer is exempt from the rule. He cites California and Connecticut authorities to support his claim that the rule does not apply to lawyers appearing pro se. Schaefer also asserts that Formal Opinion 8 is non-binding and fails to unequivocally prohibit pro se lawyers from contacting represented parties. In contrast, the state bar argues that, as a lawyer, Schaefer should have a greater understanding of professional rules. They reference Wisconsin authority establishing that conduct like "an offensive personality" and "conduct unbecoming a member of the bar" are clearly defined. The bar claims Schaefer was aware of the prohibitions through Formal Opinion 8 and a prior public reprimand for similar conduct. While acknowledging that Formal Opinion 8 is non-binding, the committee emphasizes that it explicitly prohibits contact between lawyer-parties and opposing parties known to be represented. The standard for vagueness, as defined by the U.S. Supreme Court, indicates a rule is impermissibly vague if it leaves individuals guessing about its meaning. The analysis must consider judicial opinions interpreting the statute and recognize that vagueness concerns intensify in First Amendment contexts. The committee concludes that the combination of Formal Opinion 8's non-binding status and conflicting jurisdictional interpretations renders SCR 182 vague concerning Schaefer's self-representation. It indicates that without clear guidance, Schaefer could reasonably believe the rule did not apply to him. Although his actions could be deemed unprofessional, SCR 182 did not clearly prohibit his contact with represented parties. The state bar's references to definitions of "offensive personality" and ethical rules lack binding case law on SCR 182 during the relevant time. Additionally, California rules allow self-represented lawyers to contact represented parties, further complicating the interpretation of SCR 182's applicability. The court clarified that "conduct unbecoming a member of the bar" encompasses the legal profession's code of conduct and referenced specific rules to warrant further investigation into the lawyers' actions in a disciplinary context. It stated that SCR 182 does not clarify its application to self-represented lawyers. The court rejected the relevance of Schaefer's 1981 reprimand concerning SCR 182, noting that the earlier version of SCR 190 prohibited communication with represented parties under all circumstances, unlike the current SCR 182, which may cause confusion for self-represented attorneys. The court emphasized that due process prevents the application of new interpretations of laws to actions not previously disclosed as prohibited. Although SCR 182 is not criminal, its provisions were not clearly defined regarding self-representation until now, thereby notifying Nevada lawyers that the rule applies even when they represent themselves. Schaefer's argument that SCR 182 is vague in relation to his self-representation was deemed meritless. Additionally, his claim that the rule is unconstitutionally overbroad, as it includes permissible communications like settlement discussions, was dismissed for lack of supporting authority. The court explained that such discussions could disadvantage unrepresented parties and lead to the disclosure of privileged information, thus justifying the rule's limitations. The rule's restriction on contacting represented parties does not infringe on substantial amounts of constitutionally protected conduct. Lastly, Schaefer's assertion that his Sixth Amendment rights allowed him to contact witnesses, despite a no-contact order and Mr. Fox being a represented party in a related case, was also rejected. Schaefer's communication related to the civil conspiracy case, constituting a violation of a court-imposed no-contact order. He attempted to persuade the Foxes to alter their testimony in the criminal case, which is illegal. Schaefer's challenge to the denial of his request for a continuance for obtaining counsel is unpersuasive; he had ample notice and time to secure representation before the hearing. The court is not bound by the disciplinary panel's recommendations and must independently assess evidence of ethical violations, which must be proven by clear and convincing evidence. The panel found violations of SCR 173(3) and SCR 203(4) related to Schaefer's conduct in the injunction case, specifically that he improperly included costs in an order not awarded by the court. For his visit to the Foxes, he was found to have violated SCR 173(6) by offering a deal for favorable testimony, but the basis for finding a violation of SCR 203(2) was unclear, and it was not charged in the complaint. The violations of SCR 182 and SCR 203(4) related to this conduct were not charged. Additionally, Schaefer violated SCR 182 by directly contacting the Association president about a global settlement, against explicit instructions to communicate through counsel. Schaefer, while representing Schaefer, Inc., was found to have violated several professional conduct rules, including SCR 170 (meritorious claims), SCR 182 (communication with a represented party), SCR 203(1) (rules of professional conduct), SCR 203(3) (misconduct involving dishonesty), and SCR 203(4) (conduct prejudicial to administration of justice). Specifically, Schaefer improperly included the Thaler Trust as a party-plaintiff without authorization, knowing the trustee was unavailable to discover his actions, and filed a frivolous complaint, resulting in a $5,000 sanction that he has not paid. The evidence supports violations of SCR 170 and SCR 203(3) but does not include the other charges as they were not part of the complaint. In the Mirage cases, Schaefer violated SCR 182 by contacting Mirage employees despite being instructed not to, but this violation was not considered for disciplinary action since he was self-represented. In Texas, he violated SCR 172 and SCR 203(3) by submitting a false affidavit for pro hac vice admission, misrepresenting his disciplinary history. The court has jurisdiction over Schaefer’s conduct in Texas as he is licensed in Nevada. The panel identified multiple violations, including SCR 170, SCR 172, and multiple instances of SCR 182 and SCR 203. However, certain violations were disregarded as they were not charged in the complaint. Aggravating factors were established, including a pattern of misconduct, multiple offenses, and Schaefer's refusal to acknowledge any wrongdoing. The record supports these findings of aggravating factors. Schaefer's disciplinary history is significant for determining sanctions and includes two public reprimands and a suspension. The first reprimand, issued in 1981, was for taking a default without notifying opposing counsel and engaging in unauthorized settlement discussions. The second, in 1995, was imposed as reciprocal discipline following a California order that cited multiple violations, including disobeying a federal court order, making threats to opposing counsel, and failing to safeguard client files. In 1998, Schaefer received a one-year stayed suspension, with 30 days served, for failing to comply with conditions of the earlier California disciplinary order. The conclusion reached is that disbarment is justified due to Schaefer's extensive disregard for the rights of others and the justice system. Specific actions indicative of this include improperly naming the Thaler Trust as a party, attempting to influence witness testimony, unilaterally awarding costs, and submitting a false affidavit to the Texas court. Schaefer’s consistent refusal to acknowledge the impropriety of his actions suggests a lack of likelihood for future improvement. Therefore, disbarment serves to protect the public and uphold the integrity of the legal profession. Schaefer is required to pay for the disciplinary proceedings within 30 days, and both he and the state bar must comply with SCR 115. Multiple cases and statutes are referenced regarding issues of due process, vagueness, and First Amendment rights. Key points include: - Judicial interpretations can alleviate vagueness in statutes, but such constructions cannot be applied retroactively if they broaden the conduct covered (Lanier, Bouie). - The First Amendment may be violated if a statute is vague enough to chill protected speech, even if it does not violate due process (Ashton, Reno). - SCR 182 is determined not to violate the First Amendment. - The importance of notification of charges in due process is emphasized (Burgess, Claiborne). - Due process requirements must be observed in bar proceedings, including having a sufficient factual basis for tribunal findings (Burgess, Claiborne). - NRS 199.240 establishes penalties for influencing witness testimony, classified as a category C felony. Overall, the document underscores the balance between ensuring clarity in legal statutes and upholding constitutional protections in legal proceedings.