NEW ORLEANS – The Fifth Circuit Court of Appeals upheld sanctions against two attorneys in June, who were disciplined in 2015 for allegedly paying for referrals for claims related to the 2010 BP oil spill in the Gulf of Mexico.
Attorneys Jonathan Andry and Glen Lerner remain disqualified from representing claimants in the oil spill after U.S. District Court Judge Carl Barbier ruled in 2015 that they acted unethically -- violating rules related to dishonesty, deceit and misrepresentation.
These sanctions are limited to the claims process in the Deepwater Horizon litigation, N. Gregory Smith, a professor at Louisiana State University School of Law, told the Louisiana Record.
But even though the sanctions imposed by Barbier are limited in scope, specifically to the Deepwater Horizon situation, Andry and Lerner could face other sanctions.
“Any Louisiana lawyer who violates the Louisiana Rules of Professional Conduct can be subject to professional discipline under rules established by the Louisiana Supreme Court,” Smith said.
Those sanctions, as set out by Rule XIX of the Louisiana Supreme Court, include disbarment, suspension for up to three years, probation for up to two years, a written reprimand, an order to pay restitution or even limitation of the lawyer’s future practice.
A decision like this can send different messages depending on who is interpreting the decision.
“The existence of a lawyer disciplinary process that actually imposes discipline on lawyers is likely to encourage other lawyers to comply with the applicable rules of conduct,” Smith said. “Members of the public who learn that a lawyer has been disciplined might have different reactions. One reaction might be to conclude that lawyers misbehave. Another reaction might be to conclude that there is an effective system of discipline in place that actually sanctions lawyers who engage in misconduct. This latter message, to the extent it is received, would tend to promote confidence in the legal system, which we need if we are to have an orderly society that operates without undue coercion.”
This case may lead some to question the legality of referral payments. In some cases, Smith said, referral payments are legal. But, he said that the rule the courts looked at in this case did not expressly deal with referral fees.
“There is another rule that imposes limitations on dividing fees with a lawyer in another firm,” Smith said. “This rule is not about referral fees as such, but it does indicate how lawyers in different firms can appropriately divide a fee. It could apply in a case in which a lawyer in one firm refers a matter to a lawyer in another firm, but both lawyers have worked on the matter. The Fifth Circuit Court of Appeals decision focused on this rule.”
That rule is known as Rule 1.5(e) and it allows attorneys in different firms to split a fee if three things occur: a client agrees in writing that they will be represented by all involved lawyers and is notified of how much each attorney will receive; the total fee is determined reasonable; and each lawyer delivers meaningful legal services to the client.
In March, the State Bar of Nevada filed a complaint against Lerner. According to a search of the Louisiana Attorney Discipline Board, Andry is currently eligible to practice law and is not facing disciplinary actions.