Tuesday, August 25, 2009

Eleventh Circuit Affirms Sanction Order Relating to Improper Solicitation of Clients

In Hamm et al v. TBC Corporation (09-11221), the Eleventh Circuit affirmed the district court's sanction order. The court stated:

A few months after the case was filed, Tire Kingdom filed a motion seeking court-imposed sanctions against SLG for direct solicitation of putative class members, in violation of Southern District of Florida Local Rule 11.1.C and Florida Rule of Professional Conduct 4-7.4(a). In the motion, Tire Kingdom alleged that SLG impermissibly solicited at least three then current Tire Kingdom employees – Christopher Johnson, Nicholas Kilgore, and Shane Cook – in an attempt to convince them to join the pending lawsuit and have SLG represent them.


“[A] federal court has the power to control admission to its bar and to discipline attorneys who appear before it.” Chambers v. NASCO, Inc., 501 U.S. 32, 43 (1991). A court’s decision as to “whether a party or lawyer’s actions merit imposition of sanctions is heavily dependent on the court’s firsthand knowledge, experience, and observation.” Harris, 97 F.3d at 506. The Rules Regulating the Florida Bar (“Florida Rules”) contain an anti-solicitation provision which mandates that “a lawyer shall not solicit professional employment from a prospective client with whom the lawyer has no family or prior professional relationship, in person or otherwise, when a significant motive for the lawyer’s doing so is the lawyer’s pecuniary gain.” R. Reg. Fla. Bar 4-7.4(a). The Southern District of Florida Local Rules (“Local Rules”) subject attorneys to discipline for violating the Local Rules or Florida Rules. S.D. Fla. L. R. 11.1.C. Such disciplinary measures may include disbarment, monetary sanctions, or “any other sanction the Court may deem appropriate.” S.D. Fla. R. I.B.


The district court expressly identified the purposes of the sanctions as “ensuring that counsel acts ethically in this litigation and . . . sanctioning The Shavitz Law Group for unethically soliciting clients.” Hamm v. TBC Corp., 597 F. Supp. 2d 1338, 1340 (S.D. Fla. 2009) (emphasis added). There is no evidence indicating the district court intended for these sanctions to apply to future cases, or that the misconduct in this case would impact suits against defendants other than Tire Kingdom.


In the instant case, an evidentiary hearing was held, the report and recommendation contained detailed factual findings, and the magistrate judge discussed the Gulf Oil opinion when determining the appropriate form of sanctions. Under these circumstances, the district court did not abuse its discretion by prohibiting SLG from representing or collecting fees from opt-in plaintiffs, other than those that were co-workers of the named plaintiffs.


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