Delaware Supreme Court Clarifies Standards for Enforcement of Legal Ethics and Attorney Conduct

Crumplar v. The Superior Court of the State of Delaware, No. 643 & 644, 2011 (Del. Supr., Oct. 22, 2012).

Why this case is noteworthy: This Delaware Supreme Court opinion establishes new rules and standards that will govern when trial judges seek to penalize lawyers for “not following the rules” of legal ethics and civil procedure.

Background: This case involves the appeal by an attorney of a penalty, or sanction, imposed by the trial judge for what the trial judge regarded as a violation of the rules applicable to lawyer conduct. In brief, the trial court imposed a penalty of $25,000 on the attorney for: (i) using an incorrect case name and citation for an otherwise accurate statement; and (ii) failure to discuss or distinguish trial court authority raised in an opponent’s motion.

Highlights of Legal Principles Promulgated

Rule 11 Standard of Review

  • Rule 11, in sum, prevents an attorney from filing papers with the court that are not supported by good faith arguments. This decision establishes that an objective test applies to a review of an attorney’s conduct to determine compliance with this rule. That is, the judge should measure the reasonableness of an attorney’s conduct based on objective criteria, as opposed to an attorney’s “internal belief”.
  • The Supreme Court underscored that: “Delaware demands more from attorneys than pure hearts and empty heads.” Slip op. at 12.
  • Delaware’s High Court clarified that: “the attorney’s duty is one of reasonableness under the circumstances; an attorney’s subjective good-faith belief in the propriety of his actions does not alone satisfy Rule 11.” Slip op. at 13.
  • “An attorney who fails to respond directly to an opponent’s citation of contrary Superior Court cases does not ipso facto face Rule 11 sanctions.” Slip op. at 14.

Standing

  • A nonclient litigant does not have standing to argue that its opposing counsel should be disqualified because of a conflict of interest. See In Re Infotechnology, 582 A.2d 215, 218 (Del. 1990). This concept is well-settled in Delaware, but this decision extends that concept.
  • In order for disqualification to be appropriate, “the litigant must show that the conflict prejudiced the fairness of the proceeding, not merely that a violation of the Rules had occurred”. Slip op. at 16. This protects against parties who are officious intermeddlers and are more concerned with attacking opposing counsel than enforcing proper attorney conduct.  See generally footnote 43 citing to case supporting prejudice when an attorney was both a witness and trial counsel.
  • Judges have no independent authority to enforce the Rules of Professional Conduct absent conduct that “prejudicially disrupts the proceeding.” Slip op. at 16.
  • Rule 11 violations, henceforth, cannot be the basis for attorney sanctions if a trial judge believes an attorney has committed misconduct “in the absence of prejudicial disruption of the proceeding.”  Slip op. at 16-17. In light of the Supreme Court’s exclusive power to supervise the practice of law and enforce the Rules of Professional Conduct, the trial judge’s proper course of action is to refer the matter to the Office of Disciplinary Counsel, an arm of the Supreme Court.

Due Process Requirement for Penalties Imposed on Lawyers by Trial Judge

  • This opinion also announces a new standard of fairness in Rule 11 matters in which the court seeks to impose sanctions on an attorney sua sponte. Trial judges who unilaterally seek to impose Rule 11 sanctions on an attorney pursuant to Rule 11(c)(1)(B) need to comply with the following standard: “A ‘reasonable opportunity to respond’ when a court invokes Rule 11 (c)(1)(B) should include an opportunity for the attorney to present evidence and respond orally before a court imposes sanctions.” Slip op. at 21.

SUPPLEMENT: For a comparison of a recent federal court decision applying Rule 11 in the District of Delaware, see Grynberg v. Total Compagnie Francaise Des PetrolesNo. D65181-LS (D.Del. Sept. 18, 2012), Stark, J.