Thursday, March 7, 2002
U.S. Court May Disbar Lawyer Based on Out-of-State Court Discipline—Court
By ROBERT GREENE, Staff Writer
Beverly Hills attorney Steven Kramer, already disciplined in three states and convicted in Los Angeles of felony misappropriation of client funds, took another blow yesterday as the Ninth U.S. Circuit Court of Appeals upheld his disbarment from practice before the federal trial court in Los Angeles.
The appeals court ruled that the U.S. District Court for the Central District of California acted within its discretion in banning Kramer from practice here based on his 1998 disbarment in New York.
The ruling has little immediate consequence for Kramer, who lost his license to practice in California by order of the State Bar on Jan. 18, six months after his July 23, 2001 misappropriation conviction.
But it establishes an important rule on the ability of federal district courts to ban lawyers based on their discipline in other states. A lawyer can be disbarred from a federal court based on earlier state court disbarment, the Ninth Circuit ruled, as long as the district court independently reviews the record of the state disbarment and gives the lawyer an opportunity to respond.
The lawyer bears the burden of showing by clear and convincing evidence that there was a deprivation of due process in the state court action, insufficient proof of misconduct, or a grave injustice that would result from imposition of discipline.
“Kramer has not demonstrated at all—let alone by clear and convincing evidence—that reciprocal disbarment is inappropriate...,” Judge Diarmuid O’Scannlain wrote.
This was the second time Kramer took the disbarment action to the Ninth Circuit. The first time, he successfully challenged the District Court’s summary process for reciprocal disbarment when the Ninth Circuit agreed that due process requires a review of the underlying record of the state court action.
On remand the District Court conducted the independent review and again imposed reciprocal discipline.
This time, the Ninth Circuit upheld the action.
Kramer could not be reached for comment.
State Bar attorney Erin Joyce said Kramer got into discipline trouble as a lawyer in New Jersey for attempting to prevent his client from agreeing to a settlement. After the client went ahead and settled, Joyce said, he sued the client.
He later was disbarred in New York in part based on the New Jersey discipline but also based on fresh charges. Joyce said Kramer was found to have been sanctioned for a wide range of discovery abuses in a case that was ordered dismissed, also as a sanction. He then filed a notice of appeal on his client’s behalf without permission at a time when he and the client had a direct conflict of interest.
In California, Joyce said, Kramer was found to have used his client trust account to pay personal expenses such as child support payments.
She said he also paid his own counsel in the State Bar discipline matter from his client trust account, causing his lawyer to be called as a witness.
In another matter, Joyce said, Kramer took an elderly client’s settlement money without telling her settlement was reached, then when the matter was discovered, offered to pay the money back in monthly installments—but never did.
Joyce said the criminal charge stemmed from an incidence in which Kramer deposited client funds from a California matter into his New York client trust account, then spent the money and offered to repay the client with a series of post-dated checks. The client eventually reported the matter to the Beverly Hills police, Joyce said.
Upon his conviction for embezzlement, the State Bar—which had already launched proceedings based on the New York and New Jersey discipline, plus new charges in California—summarily placed Kramer on involuntary inactive status.
Joyce said Kramer’s sentence in the criminal matter was time served—one day. The conviction is on appeal, she said, as is the State Bar action.
In the Ninth Circuit case, O’Scannlain was joined by Judge Barry Silverman and Senior U.S. District Judge Edward C. Reed Jr. of the District of Nevada, sitting by designation.
The case is In re Kramer, 01-55115.
Copyright 2002, Metropolitan News Company