In re Larry Klayman

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DISTRICT OF COLUMBIA COURT OF APPEALS

No. 18-BG-0100

IN RE LARRY KLAYMAN

A Member of the Bar of the

District of Columbia Court of Appeals

(Bar Registration No. 334581)

On Report and Recommendation of the

Board on Professional Responsibility

(BDN-48-08)

(Argued September 17, 2019 Decided June 11, 2020)

Stephen A. Bogorad, with whom John Thorpe Richards, Jr., was on the brief,

for respondent.

H. Clay Smith, III, Assistant Disciplinary Counsel, with whom Elizabeth A.

Herman, Deputy Disciplinary Counsel, and Jennifer P. Lyman, Senior Assistant

Disciplinary Counsel, were on the brief, for the Office of Disciplinary Counsel.

Before FISHER, THOMPSON, and BECKWITH, Associate Judges.

PER CURIAM: The Board on Professional Responsibility (the “Board”) has

recommended that this court suspend respondent Larry Klayman from the practice

of law for ninety days based on his representation of three clients in violation of Rule

1.9 (conflict-of-interest) of the District of Columbia Rules of Professional Conduct

(or its Florida equivalent). In this matter, the Office of Disciplinary Counsel

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(“Disciplinary Counsel”) takes exception to the Board’s report and recommendation

on three grounds. First, Disciplinary Counsel challenges the Board’s rejection of the

finding by Hearing Committee Number Nine (the “Hearing Committee”) that Mr.

Klayman violated District of Columbia Rule of Professional Conduct 8.4(d).

Second, Disciplinary Counsel takes exception to the Board’s rejection of the Hearing

Committee’s finding that Mr. Klayman gave false testimony and made false

representations to the Hearing Committee. Finally, Disciplinary Counsel takes

exception to the Board’s recommendation that we impose a ninety-day suspension

without a requirement that Mr. Klayman prove his fitness before being reinstated.

For the reasons that follow, we accept the Board’s recommendations.

I.

The Board adopted most of the factual findings of the Hearing Committee,

including as to the following, a summary regarding the three matters that underlie

this disciplinary matter. Mr. Klayman founded Judicial Watch and served as its in-

house general counsel from its inception in 1994 until 2003. During Mr. Klayman’s

tenure at Judicial Watch, Sandra Cobas served as the director of Judicial Watch’s

Miami Regional Office. She complained to Judicial Watch about her employment

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conditions, alleging that she was subject to a hostile work environment during

several weeks in 2003. As general counsel, Mr. Klayman provided legal advice to

Judicial Watch concerning Cobas’s claims. After both Mr. Klayman and Ms. Cobas

had ended their employment with Judicial Watch, Ms. Cobas filed a complaint

against Judicial Watch in a Florida state court, making the same hostile-work-

environment allegations. The Florida trial court granted a motion to dismiss the case

(calling the complaint “‘silly and vindictive’”). Thereafter, without seeking consent

from Judicial Watch, Mr. Klayman entered an appearance on Ms. Cobas’s behalf

and filed a motion requesting that the trial court vacate its order of dismissal. When

the motion was denied, Mr. Klayman filed a notice of appeal on Ms. Cobas’s behalf

and, later, a brief in a Florida appellate court, but the appellate court affirmed the

dismissal.

In 2002, while still employed by Judicial Watch, Mr. Klayman solicited a

donation from Louise Benson as part of a campaign to raise funds to purchase a

building for the organization. Klayman was acting as both chairman and general

counsel of Judicial Watch when he solicited this donation from Benson. Ms. Benson

committed to donate $50,000 to the building fund, and thereafter paid $15,000

towards that pledge. Judicial Watch did not purchase a building. In 2006, after Mr.

Klayman had left Judicial Watch, he and Ms. Benson filed a lawsuit against Judicial

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Watch in federal court, where they were represented by attorney Daniel Dugan.

Ultimately, the federal district court dismissed Ms. Benson’s claims (but not Mr.

Klayman’s claims) on jurisdictional grounds. Shortly thereafter, Ms. Benson sued

Judicial Watch in the Superior Court of the District of Columbia, alleging inter alia

unjust enrichment and seeking a return of her donation. Initially, she was

represented in that suit by Mr. Dugan. Eventually, and without seeking consent from

Judicial Watch, Mr. Klayman entered an appearance in the case as co-counsel for

Ms. Benson. Judicial Watch requested that Klayman withdraw, stating that he

organized the fundraising effort that was at the center of Ms. Benson’s complaint

while he was Judicial Watch’s attorney, and noting that Ms. Benson had identified

him as a fact witness. When Mr. Klayman did not withdraw, Judicial Watch moved

to disqualify him. The motion for disqualification was never decided, as the parties

stipulated to the dismissal of the case.

In 2001, while Mr. Klayman was still employed by Judicial Watch, Judicial

Watch and Peter Paul entered into a representation agreement, and a modification

thereto, under which Judicial Watch agreed to evaluate legal issues emanating from

Mr. Paul’s fundraising activities during the election campaign for the New York

State Senate in 2000 and to represent him in connection with an investigation into

alleged criminal securities law violations and possible civil litigation stemming from

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those fundraising activities. Mr. Klayman drafted, edited, and approved the

representation agreement and modification and authorized the signing of both

documents as Judicial Watch’s chairman and general counsel. Judicial Watch later

represented Mr. Paul in a civil lawsuit brought in California state court. Following

Mr. Klayman’s departure from Judicial Watch, Judicial Watch withdrew from the

representation. Thereafter, Mr. Paul sued Judicial Watch in the United States

District Court for the District of Columbia alleging, among other theories, that

Judicial Watch breached its representation agreement with him. While Mr. Paul

initially was represented by Mr. Dugan, Mr. Klayman entered an appearance in the

case without seeking Judicial Watch’s consent. Judicial Watch moved to disqualify

Mr. Klayman. The district court (the Honorable Royce Lamberth) granted the

motion to disqualify, finding that Mr. Klayman’s representation of Mr. Paul violated

Rule 1.9. The court found that Mr. Klayman was representing the plaintiff “in a

matter directly arising from an agreement he signed in his capacity as [g]eneral

[c]ounsel for the current defendant” and that Mr. Klayman’s representation of Mr.

Paul was “the very type of ‘changing of sides in the matter’ forbidden by Rule 1.9.”

The Hearing Committee found that Mr. Klayman violated Rule 1.9 (or its

Florida equivalent) in all three matters and violated Rule 8.4(d) in the Paul matter.

It also found that Mr. Klayman gave false testimony before the Hearing Committee

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and that his disciplinary history in Florida in connection with an unrelated matter

was another aggravating factor. On the basis of all the foregoing, the Hearing

Committee recommended that Mr. Klayman be suspended for ninety days, with

reinstatement contingent upon a showing of his fitness to practice law. The Board,

by contrast, recommended that Klayman be suspended for ninety days with no

fitness requirement. The Board disagreed with the Hearing Committee’s finding that

Disciplinary Counsel proved a violation of Rule 8.4(d) and with its finding that Mr.

Klayman provided false testimony.

Before this court, neither Mr. Klayman nor Disciplinary Counsel takes issue

with the finding that Mr. Klayman violated Rule 1.9 or its Florida equivalent in the

matters described above, and we therefore need not address that finding. Rather, as

the Board did, we adopt the vast majority of the Hearing Committee’s thorough

analysis. However, as noted above, Disciplinary Counsel takes exception to the

Board’s findings regarding Rule 8.4(d) and false testimony, and to the Board’s

recommended sanction insofar as it omits a fitness requirement. We discuss these

matters below.

II.

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Disciplinary Counsel has the burden of proving a violation of the Rules of

Professional Conduct by clear and convincing evidence. In re Speights, 173 A.3d

96, 99 n.3 (D.C. 2017). “When reviewing a recommended disciplinary sanction

against an attorney, this court must accept the Board’s findings of fact if they are

supported by substantial evidence.” In re Sneed, 673 A.2d 591, 593 (D.C. 1996).

The Board “has the power to make its own factual findings” but “must accept the

Hearing Committee’s evidentiary findings, including credibility findings, if they are

supported by substantial evidence in the record.” In re Bradley, 70 A.3d 1189, 1193

(D.C. 2013) (internal quotation marks and emphasis omitted). “Substantial evidence

means enough evidence for a reasonable mind to find sufficient to support the

conclusion reached.” In re Thompson, 583 A.2d 1006, 1008 (D.C. 1990). “[T]he

Board and this court owe no deference to the Hearing Committee’s determination of

‘ultimate facts,’ which are really conclusions of law and thus are reviewed de novo.”

Bradley, 70 A.3d at 1194. “Whether [a] respondent gave sanctionable false

testimony before the Hearing Committee is a question of ultimate legal fact that the

Board and this court review de novo.” Id. “[T]his court usually adopts the Board’s

recommended sanction ‘unless to do so would foster a tendency toward inconsistent

dispositions for comparable conduct or would otherwise be unwarranted[.]’” Sneed,

673 A.2d at 593.

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III.

Rule 8.4(d) establishes that it is professional misconduct for a lawyer to

“[e]ngage in conduct that seriously interferes with the administration of justice[.]”

Id. For conduct to violate Rule 8.4(d), the conduct must be improper, “bear directly

upon the judicial process,” and “taint the judicial process in more than a de minimis

way.” In re Carter, 11 A.3d 1219, 1224 (D.C. 2011) (internal quotation marks

omitted).

Disciplinary Counsel asserts that the “Board erred by overturning the Hearing

Committee’s conclusion that Mr. Klayman violated Rule 8.4(d) when he appeared

on behalf of [Mr.] Paul with a ‘clear conflict of interest’ and litigated against

disqualification for the second time.” The Board cited a number of reasons for

rejecting the Hearing Committee’s conclusion, including its longstanding “concern[]

about the scope of Rule 8.4(d) in litigation-related disciplinary matters” and its view

that any Rule 8.4(d) violation would be “derivative of the conflict[-]of[-]interest

finding.” But the Board primarily followed this court’s lead in considering the views

of the judge who presided over the litigation in which the disqualification motion

was filed. See In re White, 11 A.3d 1226, 1232 (D.C. 2011). The Board found it

“extra significan[t]” that Judge Lamberth, though he granted the motion to disqualify

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Mr. Klayman, found “‘a legitimate debate about [Mr. Klayman’s] conduct’” and

further found that Mr. Paul was a needy client who could not otherwise have afforded

legal services. In light of the “extraordinary situation” of Judge Lamberth’s

“supportive testimony” to the Hearing Committee, the Board was unable to conclude

that Mr. Klayman’s “behavior sufficiently tainted the judicial process to a degree

adequate to sustain the Rule 8.4(d) charge.” 1 We accept the Board’s reasoning and

agree that no Rule 8.4(d) violation was proven by clear and convincing evidence.

IV.

Before the Hearing Committee, Mr. Klayman testified, “I believed that Mr.

Dug[]an had given the advice of counsel that I could do this [i.e., represent Ms.

Benson], otherwise he [Dugan] wouldn’t have prepared the pleading” opposing the

motion to disqualify Mr. Klayman based on Rule 1.9.” The Hearing Committee

found that this testimony was false, as was Mr. Klayman’s testimony that Mr. Dugan

“was the one who prepared the response to that disqualification motion.”

1

The Board noted that in White, by contrast, Judge Lamberth concluded that

White’s conduct had tainted the proceedings; specifically, “[t]he entire litigation was

disrupted and delayed while the [d]istrict [c]ourt dealt with the motion to

disqualify[,]” and the court had to strike an entire deposition because of White’s

presence. Id. at 1232.

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Disciplinary Counsel contends that this court should defer to the Hearing

Committee’s false-testimony findings as supported by substantial record evidence.

The Board found that Disciplinary Counsel failed to prove by clear and

convincing evidence that Mr. Klayman gave false testimony. The Board observed

that the Hearing Committee had relied almost entirely on Mr. Dugan’s testimony

that he did not endorse Mr. Klayman’s appearance in the Benson matter. The Board

reasoned, however, that the forcefulness of Mr. Dugan’s testimony was undercut by

his repeated inability to recall the substance of key conversations that took place

between him and Mr. Klayman eight years earlier. In addition, the Board cited prior,

“apparently inconsistent” statements that Mr. Dugan had made about the matter

(e.g., Mr. Dugan’s apparent statement to Judicial Watch’s counsel, referred to in

Judicial Watch’s memorandum in support of its motion to disqualify, that there was

“no ethical issue arising from” Mr. Klayman’s representation of Ms. Benson).

The Board’s description of Mr. Dugan’s “diminished recollection” of his

discussions with Mr. Klayman about the latter’s entry of his appearance in the

Benson matter, and about Judicial Watch’s demand that Mr. Klayman withdraw

from the representation, is supported by the record. Further, while the Hearing

Committee reasoned that Mr. Klayman “cannot have inferred” that Mr. Dugan

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blessed his entry of appearance in the Benson matter from Mr. Dugan’s filing of the

opposition to the motion to disqualify since Mr. Dugan “did not write the

opposition[,]” Mr. Dugan acknowledged that his associate may have edited the draft

opposition before it was filed, acknowledged that he (Dugan) did sign the opposition,

and testified that he would not have done so if he had thought that it was frivolous

or thought it violated any ethics or pleadings rules. Additionally, Mr. Klayman’s

testimony was to the effect that the circumstances caused him to believe that Mr.

Dugan had given the advice of counsel. We agree with the Board that there was not

proof by clear and convincing evidence that Mr. Klayman testified dishonestly as to

his belief and recollection. Accordingly, we accept the Board’s conclusion rejecting

the finding that Mr. Klayman testified falsely.

V.

In explaining its sanction recommendation, the Hearing Committee found that

Mr. Klayman’s misconduct was aggravated by his prior discipline in Florida and his

denial of responsibility as to the underlying conduct. He received a public reprimand

in that jurisdiction after he failed to timely pay the full amount ($5,000) he had

agreed to repay to a former client after mediation to resolve a fee dispute. The Board

gave this matter little weight because of Mr. Klayman’s explanation that a serious

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car accident had rendered him unable to work at full capacity and caused him

“significant financial difficulties” that affected his ability to pay. We accept that

evaluation.

We also accept the Board’s conclusion that Disciplinary Counsel did not show

that a fitness requirement is warranted in this case. To be sure, Disciplinary Counsel

proved that Mr. Klayman flagrantly violated Rule 1.9 on three occasions. His

misconduct was not isolated, and, it appears, he acted vindictively and “motivated

by animus toward Judicial Watch” (with which he had developed an acrimonious

relationship). We agree with the Board and the Hearing Committee that his

misconduct was intentional rather than inadvertent or innocent. We also readily

agree with the Board that his misconduct — involving a “switch[ing of] sides” that

strikes at the integrity of the legal profession — deserves the serious sanction of a

ninety-day suspension. Nevertheless, we are not left with “[s]erious doubt” or “real

skepticism” that Mr. Klayman can practice ethically. In re Adams, 191 A.3d 1114,

1120 (D.C. 2018). Accordingly, we decline to impose a fitness requirement. We

do, however, concur with Disciplinary Counsel’s original recommendation that Mr.

Klayman be ordered to complete a continuing legal education (“CLE”) course on

conflicts of interest.

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Wherefore, effective thirty days after entry of this order, Mr. Klayman is

suspended from the practice of law. The period of suspension is ninety days,

commencing after he has filed the affidavit required by D.C. Bar R. XI, § 14(g).

Before reinstatement, he must also complete a CLE course on conflicts of interest. 2

So ordered.

2

The pending motion by his counsel to withdraw is hereby granted.