Federal Suit Against Oregon State Bar Alleges Favoritism and Discrimination

Friday, February 27, 2015

Annie Ellison, GoLocalPDX Reporter

A lawsuit filed in U.S. district court against the Oregon State Bar (OSBar), and the bar’s general counsel, alleges favoritism and bias in how the organization administers complaints against lawyers.

The suit alleges decisions on more than 3,000 complaints against Oregon lawyers were delayed, and that complaints from clients charged with a crime were disproportionately more likely to be dismissed. Furthermore, lawyers at some of the city’s largest firms were up to three times less likely to be disciplined, the suit alleges.

Software developer and former VP of Marketing for Oracle Corp. James Reilly and Victoria Jelderks filed the suit Feb. 26 against the Oregon State Bar Association and general counsel Helen Hierschbiel.

“If you are from an influential firm in the state of Oregon, you can do whatever you want and the bar can dismiss it,” Reilly said. “As a consequence, these big firms are breaking the law with impunity.”

Reilly claims his research shows a bias in the state’s disciplinary process that favors large Oregon firms, and discriminates against incarcerated complainants.

“It undermines due process and equal justice under the law,” Reilly said. “Others living in the USA might have had their lives destroyed by a negligent or incompetent lawyer or even worse an unethical prosecutor.”

Out of 1,493 complaints against lawyers in criminal cases between 2011 and 2014, 140 were disciplined.

Complaints and Appeals claim

As OSBar General Counsel, Helen Hierschbiel handles OSBar complaints and appeals, advises members on legal ethics questions, including identifying applicable disciplinary rules and providing reactions to ethics questions.

Reilly and Jelderks are demanding $100,000, calling for Hierschbiel’s suspension, an investigation into her record of dismissals, and a referral of all appeals older than 90 days to the bar’s disciplinary committee. under 18 USC 242, deprivation of rights under color of law, and 42 USC 1983, civil action for deprivation of rights, and malfeasance in office.

The suit calls for an injunction against Hierschbiel preventing any more dismissals, a review of and “that a formal investigation into the unfair practices at the Oregon State Bar be initiated with the ultimate goal of removing control of disciplinary actions and review from the Bar itself to a judicial body that can act independent of coercion from influential or corrupt bar members.”

Over the course of three years, firms with less than two staff were found to be at least twice as likely to have a complaint referred for discipline, according to Reilly’s data findings. Over those three years, 2324 complaints were filed against lawyers at small firms. Of those, 451 were disciplined and 32 were on appeal. In total, 19.4 percent of complaints were disciplined at small firms.

Between 2011 and 2014, 1263 complaints were filed against lawyers at firms with more than two staff members. Of those, 109 were referred for discipline and 24 were on appeal. In total, 8.6 percent were referred for discipline.

The suit also alleges Hierschbiel, the 15-year general counsel, failed to recuse herself from a Sept. 25, 2014 conflict of interest complaint filed by Reilly against Shannon Armstrong, then the Chair of the OSBar’s Legal Ethics Committee. Hierschbiel and Armstrong served together on a 2013 bar committee.

Complaints Dismissed

Reilly and Jelderks’ suit dates back to a 2014 OSBar complaint against two lawyers from the firm Markowitz Herbold for an alleged misrepresentation to the city of Vader, Wash.

Blue Array, a company owned by Jelderks and Reilly, installed a wastewater treatment plant in Vader, and as part of the ongoing arbitration over the company, now dissolved, MH lawyers acted on behalf of Reilly’s investor, JH Kelley LLC.

Reilly’s 2014 complaint was dismissed, he claims without it being read.

Incarcerated complainants

Based on the data, the suit alleges Hierschbiel “biases her decisions against smaller firms' complaints [and] is eight times more likely to dismiss complaints made by incarcerated convicts.”

The papers filed Feb. 26 also call for a fund to be set up to assist convicts whose complaints were “wrongly dismissed by the OSBar.”

In a letter to District Judge Anna J. Brown Feb. 16, Reilly wrote his data reveals a backlog of complaints under appeal that extend several years.

According to a Nov. 17, 2014 email sent to Reilly from Hierschbiel, there is no time limit on how long it takes the bar to respond to an appeal if a complaint is dismissed.

All complaints regarding Oregon lawyers are first reviewed by the bar’s Client Assistance Office, which determines whether the complaint is to be investigated and referred to the Disciplinary Counsel’s Office, or dismissed.

Based on the findings of an American Bar Association report, the Oregon Discipline System Review Committee at the OSBar is reviewing the disciplinary processes.

The report’s 19 recommendations included several measures to streamline and enhance the transparency of the the disciplinary process, improve the efficiency and consistency of disciplinary hearings, limit the function of the State Professional Responsibility Board, and establish clearer rules and better coordination among departments.

OSBar spokeswoman Kateri Walsh said the organization was not aware of the suit and would not comment.

Related Slideshow: The Five Worst Cases of Attorney Misconduct 2012-2014

Prev Next

#5

Paul Handy

Handy resigned from the Bar in 2013, after he siphoned money from a client in the few years leading up to his death, according to bar association documents.

Handy withdrew $50,000 from his client’s trust account over a period of a few years, affidavts state. After the client died, a representative of the estate asked about the funds. Handy lied, saying the money was still there.

In the middle of the bar’s investigation, which also included forgery claims, Handy resigned.

Prev Next

#4

W. Scott Phinney

Phinney was disbarred after he was caught in an embezzlement scheme. The Tualatin lawyer was the elected treasurer of the Yale Alumni Association of Oregon, entrusted to handle the bank account and report on finances.

Bar association documents say when Phinney fell on hard times in 2008, he started writing checks from the association to himself, as well as transferring cash. Over a year and a half, Phinney wrote 21 checks for $31,600 to himself.

Although he gave full and complete disclosure during the investigation and had established personal and emotional problems, the Oregon Supreme Court disbarred Phinney in 2013.

Prev Next

#3

Susan Steves

Steves was disbarred after series of mishandled cases that hurt clients and benefited herself.

In one instance outlined in Oregon Supreme Court documents, she disobeyed the court and delayed proceedings for a child custody case. While one parent racked up excessive child-support and court fees, the other was delayed in receiving child support while the court straightened the case out. Another time, Steves did not prepare for a case and failed to show up to hearings with her client.

In both cases, Steves personally gained from her actions, and cost her clients and the court time and money, the court found. The Oregon State Bar Disciplinary Board disbarred the Bend Lawyer in 2014, in light of past suspensions for similar actions.

Prev Next

#2

Robert Browning

Browning was a lawyer in Forest Grove, before he stealing from his own mother and resigning from the bar, according to Oregon Supreme Court documents,

Browning left admit pending allegations in 2014, resulting from his conviction for 13 counts of first degree criminal mistreatment. While representing his mother and mother-in-law, Browning had transferred funds from their investment and bank accounts into his own, according to his resignation form. The two had no idea he was doing it, yet alone it was for his own personal uses, the form states.

Browning was facing other complaints charing excessive fees and failing to handle client’s cases properly as well when he resigned.

Prev Next

#1

Edgar Steele

Steele made a name for himself as a lawyer defending the Aryan Nations in a civil rights case and publicly voicing white supremacist ideologies, according NBC.

Yet it was a murder plot that got him disbarred in Oregon. Steele was arrested and convicted for hiring a man to kill his wife and mother-in-law, according to bar association documents. A bomb was planted in Steele’s wife car, but failed to detonate.

As a result, the Oregon Bar Association disbarred Steele in 2013. Steele was serving a 50 year prison sentence in California when he died in 2014.