Tuesday, February 17, 2009

Winterrowd v. American General Annuity Ins. Co. (9th Cir. - Feb. 17, 2009)

Ever litigate a case in a federal district court outside your state? Lots of us have. Ever consult and/or help another lawyer in one of those cases? Not so rare anymore. Judge Milan Smith has a fairly good quote in this regard that's both accurate and worth repeating: "Even at a time when the largest law firms in the United States were composed of not many more than one hundred lawyers, Judge Friendly observed that we live in an 'age of increased specialization and high mobility of the bar.' Spanos v. Skouras, 364 F.2d 161, 170 (2d Cir. 1966). But in 1966, there were no personal computers, no Internet, no Blackberries, no teleconferencing, no emails, and the only person who had a two-way wrist radio was cartoon character Dick Tracy."

Why does this matter? Because there's a big fight about whether lawyers who practice outside of their jurisdiction -- perhaps in the background -- without being admitted pro hac vice are engaged in the illegal practice of law. So here, the question is whether an Oregon attorney who assists a California lawyer in an ERISA action in the Central District of California can be awarded atttorney's fees even though he's not a California lawyer.

As you might gather from the rhetoric employed by Judge Smith (which includes the line "Current law does not compel us to be judicial Luddites"), the majority opinion here holds that the Oregon lawyer can, in fact, recover fees. A holding by the Ninth Circuit that's bound to be near and dear to many lawyers (and I'll forthrightly concede my self-interest on this point) who similarly assist other lawyers in out-of-district litigation.

Judge Rymer, however, dissents. And makes some darn good points, not the least of which being how easy it is to be admitted pro hac vice and hence surely entitled to fees (as well as subject to discipline). Given that reality, she argues, why let someone lurk in the background? Why not make 'em be forthrightly admitted? Judge Smith doesn't disagree with the ease of pro hac admission (indeed, uses this point affirmatively in his analysis), but does not agree that this is a necessary prerequisite to recovery of fees. Hence the fight.

I think that the realities of modern litigation, as well as efficiency, augur in favor of Judge Smith's position. There are a variety of legitimate reasons why in-state attorneys might want to obtain the benefits of outside counsel without getting their contributors formally admitted pro hac vice, and I think that the federal system is flexible enough to permit such a result. We could surely discourage such a practice by refusing fees or making it illegal, but I don't think the upside is worth it. Nor do I think that the federal system is bound to state law on this point, particularly when (as here) the underlying matter concerns a federal issue. Federal courts are able to apply their own procedural rules, and this seems one of them notwithstanding the fact that it involves the substantive entitlement to fees.

The federal system is often more flexible and modern than state systems. This is especially the case in areas, such as those here, in which parochial concerns (e.g., a desire to advance the use of purely local in-state counsel) often motivate the state response to an issue. So I think it's helpful to do what Judge Smith does here. It makes for better representation. And that's always a good idea.