Lawyer: Penalty annulled too late

Charlie Frago

Suspension cost $300,000, he says

LITTLE ROCK — James W. Stanley learned that he had lost his law license when he glanced at a newspaper before breakfast at the Bellwood Diner in North Little Rock last year.

He read and reread the story, which led with the suspension of his license by a state panel that governs attorney conduct.

“I read the first couple of paragraphs and decided I wasnot concentrating because I was suddenly seeing my own name in the wording and this just could not be happening,” Stanley said.

Shocked andracked with chest pains, he left the restaurant in a daze without ordering.

He hadn’t even known he was under investigation. The committee’s procedures didn’t require it to notify him.

The state Supreme Court Committee on Professional Conduct had meted out to him a five-year suspension, a penalty that has been dealt out only a handful of times, including to former President Clinton for lying under oath in the Monica Lewinsky scandal.

The committee had sent Stanley a notice of his suspension, but mailed it to an old address.

Last month, Stanley’s nightmare ended - at leasttemporarily. The Arkansas Supreme Court reversed the suspension and ordered his license reinstated.

The committee issued the suspension in April 2007 after learning that the U.S. Social Security Administration and the Department of Veterans Affairs had suspended Stanley’s privileges to represent clients in Social Security and veterans matters.

The agencies’ actions were disputes over attorney fees and were being appealed.

Over the 14 months after the state suspended his license, with his staff reduced to part-time and most of his clients gone, Stanley lost about $300,000, he calculates.

“It’s been a rough year,” said the 61-year-old Vietnam veteran whose solo practice included veterans, Social Security disability, personal injury and workers’ compensation claims.

“I was trying to endure the gutting of my life’s work,” he said.

The Arkansas Supreme Court got involved because Stanley asked the court to issue an order that would restore his license.

The court ruled that the committee wrongly reciprocated the federal agencies’ administrative suspensions to Stanley’s law license.

But the court’s favorable ruling might not end Stanley’s struggle with the state.

Stark Ligon, executive director of the committee, said the court ruling doesn’t mean Stanley won’t be disciplined.

The court order declared the committee couldn’t suspend Stanley’s license under its reciprocity procedures. That doesn’t preclude other procedures, he said.

“We’re assessing our options,” Ligon said.

Bart F. Virden, a Morrilton attorney who argued Stanley’s case before the state’s highest court, said the committee “hasdone enough” to Stanley and had no reason for further action.

Such a proceeding would be an “aberration,” said Virden, a former member of a committee panel.

The committee decided on a five-year suspension, said Ligon, because the panel was acting in reciprocity with the federal agencies. The Social Security Administration had barred him from practicing in its proceedings for five years so the state followed suit, Ligon said.

In a June 19 opinion written by Justice Donald L. Corbin, the Supreme Court ruled that the federal agencies were “administrative agencies” that weren’t “vested with the ultimate authority to license and disciplineattorneys.”

Both the VA and Social Security Administration claim that Stanley charged fees in violation of their rules.

The Social Security Administration also contends Stanley deceived his clients about their benefits or other rights under the Social Security Act.

Stanley appealed both agencies’ rulings. A federal judge dismissed Stanley’s Social Security case in 2007. An appeal in that matter is pending in the 8th U.S. Circuit Court of Appeals in St. Louis.

The VA appeal is still before an agency appeals board.

Stanley and Virden contend that the Professional Conduct Committee should have at least waited until those appeals were resolved before suspending his license.

Ligon said the committee felt that a federal judge’s dismissal of his Social Security appeal was enough to proceed with the suspension. And Stanley had filed so many documents with the VA appeals board that the appeals process had stalled, Ligon said.

The VA’s history of wrangling with attorneys who represent veterans seeking benefits has roots in the aftermath of the Civil War, said Kenneth Carpenter, an attorney in Topeka, Kan.

Unscrupulous attorneys swindled veterans, prompting Congress to cap attorney fees at $5, amended after World War Ito $10, Carpenter said.

It wasn’t until 1988 that a federal appeals court for veterans claims was created by Congress.

The law barred veterans or their survivors from hiring an attorney until after the first final decision of the VA’s appeal board.

Stanley is accused by the VA of soliciting donations from veterans that were really fees. But Carpenter - who is representing an Illinois lawyer also barred by the VA for similar reasons - said that many fee disputes with the VA are problematic.

“Really all it boils down to is a simple proposition that ...Stanley [and the Illinois lawyer were] successful in getting veteran benefits that had been denied. The VA retaliated against both by removing their accreditation,” Carpenter said.

A VA spokesman said allegations of retaliation were untrue. Privacy rules prohibited the agency from discussing Stanley’s case, said spokesman Terry Jemison.

But, in general, the agency said its duty is to protect veterans from abuse, including abuse by attorneys.

“It is VA’s obligation ... to protect the interests of veterans by ensuring that veterans have access to qualified, responsible representation in their claims for benefits and are not charged fees that are unreasonable or unduly divert their funds,” read a statement from Veteran Affairs.

Congress again changed the law in 2006 allowing veterans to hire attorneys at any point in the process of filing a claim, Carpenter said, rendering Stanley’s fee dispute “moot.”

Stanley estimates that roughly 1,000 clients left his practice since his license was suspended.

“What they did to my husband for 14 months will take 14 years to undo,” said Stanley’s wife Audrey Burtrum-Stanley.

The state professional conduct committee is a state panel, and thus immune from lawsuits in the state’s own courts.

A state agency’s sovereignimmunity would be a factor in federal court, too, said Gabe Holmstrom, spokesman for Attorney General Dustin McDaniel, but whether a suit would be successful there would depend on the particular facts of the case.

And since the Professional Conduct Committee is not funded with state dollars, Ligon said a claim probably couldn’t be filed with the state Claims Commission, which has authority to award sums to those wronged by state action or inaction.

Virden said an argument could be made that the committee is part of the state Supreme Court, making it subject to a state claim.

“I still don’t understand why they didn’t stay the suspension pending appeals,” Virden said. “Everyone agreed that this was a test case.”

Stanley said he hasn’t considered filing a claim with the state Claims Commission.

“I don’t think there is a remedy,” he said.

Arkansas, Pages 17, 23 on 07/06/2008

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