Litigation

Out-of-state lawyer gets a pass in federal court

By Lori Bauman

A claim of unauthorized practice of law figured into a dispute over attorney fees resolved this week by the Ninth Circuit.  In a lawsuit for breach of a severance contract filed in federal court in California, plaintiffs sought to recover fees under a California statute.  Defendant argued that plaintiff couldn't recover fees incurred by an Oregon lawyer (the father of the plaintiff's California lawyer) who assisted on the case because that lawyer wasn't licensed in California and wasn't admitted pro hac vice to appear in the matter.  The district court agreed, holding that the out-of-state lawyer was not authorized to work on issues of California law for a California client pending in a California court, and thus was precluded from recovering fees.

On appeal, the Ninth Circuit avoided the thorny issue of unauthorized practice of law under California law (see the 1998 case of Birbrower, Montalbano, Condon & Frank, PC v. Superior Court), noting that admission rules and procedures for federal court are independent of those for state court.  Citing federal case law, Judge Milan D. Smith, Jr. stated that the Oregon lawyer's fees are recoverable because (1) he would readily have been admitted pro hac vice in the case had he applied, and, in any event, (2) his involvement had not risen to the level of an "appearance."  As to the second point, Judge Smith wrote "This court has permitted fee recovery for the work of paralegals, database managers, legal support, summer associates, and even attorneys who have yet to pass the bar."  A lawyer who does not "appear" in the case is like a litigation consultant, and his fees should be recoverable even if he is not admitted to practice before the court in which the case is pending.

Judge Pamela Ann Rymer wrote an extensive dissenting opinion, arguing that California law on unauthorized practice of law should guide the court and would lead to a different result.

See the opinion in Winterrowd v. American General Annuity Insurance Co. here.

Full post as published by Northwest Business Litigation Blog on February 19, 2009 (boomark / email).