Justia Professional Malpractice & Ethics Opinion Summaries

Doctor Shakeel Kahn (Dr. Kahn) was convicted in federal district court in Wyoming, in part, for dispensing controlled substances not “as authorized,” in violation of the Controlled Substances Act (the CSA). Included in his appeal to the Tenth Circuit Court of Appeals was his contention that the jury instructions issued by the district court improperly advised the jury regarding the mens rea requirement of CSA § 841(a). The Tenth Circuit affirmed Dr. Kahn’s convictions, rejecting both his challenge to the instructions given, and his challenges to multiple searches and the evidence seized. In upholding the instructions, the Tenth Circuit relied on precedent, United States v. Nelson, 383 F.3d 1227 (10th Cir. 2004), and further reaffirmed its holding, which was guided by 21 C.F.R. § 1306.04(a). Dr. Kahn appealed to the U.S. Supreme Court, raising only his instructional challenge. The Supreme Court held that § 841(a)’s “knowingly or intentionally” mens rea applied to the “except as authorized” clause of the statute, vacated the Tenth Circuit's judgment, and remanded the case for further proceedings consistent with its opinion. The parties submitted supplemental briefing, and the matter went again before the Tenth Circuit. After review, the Tenth Circuit concluded the jury instructions issued in Dr. Kahn’s trial incorrectly stated the mens rea requirement of § 841(a) and the error was not harmless beyond a reasonable doubt. This prejudicial error infected all of Dr. Kahn’s convictions. Therefore, Dr. Kahn’s convictions were v View "United States v. Kahn" on Justia Law

Competing trade associations offered memberships to home inspectors, who typically inspect homes prior to home sales. Benefits of membership in the International Association of Certified Home Inspectors (InterNACHI) and the American Society of Home Inspectors (ASHI) included online advertising to home buyers, educational resources, online training, and free services such as logo design. From 2015 to 2020, ASHI featured the slogan “American Society of Home Inspectors. Educated. Tested. Verified. Certified” on its website. Contending that tagline mislead consumers, InterNACHI sued ASHI under the federal Lanham Act, claiming the line constituted false advertising because it inaccurately portrayed ASHI’s entire membership as being educated, tested, verified, and certified, even though its membership includes so-called “novice” inspectors who had yet to complete training or become certified. InterNACHI argued this misleading advertising and ASHI’s willingness to promote novice inspectors to the public caused InterNACHI to lose potential members and dues revenues. The district court granted summary judgment in favor of ASHI, concluding no reasonable jury could find that InterNACHI was injured by ASHI’s allegedly false commercial advertising. To this, the Tenth Circuit Court of Appeals concurred: because InterNACHI did not present any evidence from which a reasonable jury could find that InterNACHI was injured by ASHI’s slogan, the district court did not err in granting summary judgment for ASHI. View "Examination Board, et al. v. International Association, et al." on Justia Law

Dennis Malouf held key roles at two firms. One of the firms (UASNM, Inc.) offered investment advice; the other firm (a branch of Raymond James Financial Services) served as a broker-dealer. Raymond James viewed those dual roles as a conflict, so Malouf sold the Raymond James branch. But the structure of the sale perpetuated the conflict. Because Malouf did not disclose perpetuation of the conflict, administrative officials sought sanctions against him for violating the federal securities laws. An administrative law judge found that Malouf had violated the Securities Exchange Act of 1934, the Securities Act of 1933, the Investment Advisers Act of 1940, Rule 10b–5, and Rule 206(4)–1. Given these findings, the judge imposed sanctions. The SEC affirmed these findings and imposed additional sanctions, including disgorgement of profits. Malouf appealed the SEC’s decision, but finding no reversible error, the Tenth Circuit affirmed. View "Malouf v. SEC" on Justia Law

Plaintiffs were all former members of the Fundamentalist Church of Jesus Christ of Latter-Day Saints (“FLDS”), which illegally practiced polygamy. In 2016, plaintiffs filed suit against the FLDS Prophet, Warren Jeffs, and Jeff’s lawyers, the law firm of Snow Christensen & Martineau (“SC&M”) and one of its partners, Rodney Parker, alleging defendants: (1) directly worked with Jeffs to create a legal framework that would shield him from the legal ramifications of child rape, forced labor, extortion, and the causing of emotional distress by separating families; (2) created an illusion of legality to bring about plaintiffs’ submission to these abuses and employed various legal instruments and judicial processes to knowingly facilitate the abuse; (3) held themselves out to be the lawyers of each FLDS member individually, thus creating a duty to them to disclose this illegal scheme; and (4) intentionally misused these attorney-client relationships to enable Jeffs’ dominion and criminal enterprise. Jeffs defaulted, and the district court dismissed every cause of action against the remaining defendants under Fed. R. Civ. P. 12(b)(6). The issue before the Tenth Circuit Court of Appeals stemmed from the district court’s dismissal of all claims against SC&M and Parker (collectively “defendants”). Reviewing the facts in the light most favorable to plaintiffs, the Court affirmed in part and reversed in part. For fifteen plaintiffs who brought legal malpractice and breach of fiduciary duty claims, the Court determined they pled facts sufficient to survive a motion to dismiss: a factual question remained for each of these plaintiffs regarding whether (and how long) equitable tolling applies to their limitations periods, and whether individual implied attorney-client relationships existed. Twelve plaintiffs pled facts sufficient to survive dismissal of their fraudulent and negligent misrepresentation claims, again, there was a factual question regarding when they discovered their claims, thereby starting the running of the statutory period, and whether an implied attorney-client relationship existed. Civil RICO claims were deemed forfeited as inadequately presented in plaintiffs’ opening brief. With respect to TVPRA claims, nine plaintiffs pled facts sufficient to pass muster under the plausibility standard and thus survived dismissal. View "Bistline v. Jeffs" on Justia Law

Belsen Getty, LLC, a registered investment adviser owned by Terry Deru, obtained a claims-made financial-services-liability policy (the Policy) from XL Specialty Insurance Company covering Belsen Getty and its advisers for the period for one year. Under the policy, XL had no duty to defend. During the policy period James, Jenalyn, and Wade Morden brought claims against Belsen Getty and Deru alleging improper and misleading investment advice. XL denied coverage, asserting the Mordens’ claims and claims brought by the Securities and Exchange Commission (SEC) before the policy period concerned “Interrelated Wrongful Acts,” as defined by the Policy, and that the Policy therefore required treating the two claims as one claim made before the policy period. Belsen Getty and Deru then settled with the Mordens, assigning their rights against XL; and the Mordens sued XL in federal district court, raising the assigned claims that XL breached its covenant of good faith and fair dealing and its fiduciary duties to Belsen Getty and Deru in denying coverage under the Policy. XL counterclaimed that the Policy’s Interrelated Wrongful Acts provision precluded coverage. The Mordens moved for partial summary judgment on the counterclaim and on several of XL's affirmative defenses. XL moved for summary judgment based on the policy and for failure to prove bad faith or breach of fiduciary duty. The district court denied XL's counterclaim, but granted summary judgment on the bad-faith and fiduciary-duty claims. The Mordens appealed summary judgment against them on their bad-faith and fiduciary-duty claims and on the denial of their motion to amend their complaint to add a breach-of-contract claim. XL cross-appealed the summary judgment against it on its counterclaim that the Policy’s Interrelated Wrongful Acts provision barred all the Mordens’ claims. The Tenth Circuit reversed the denial of XL’s motion for summary judgment on its counterclaim: this reversal undermined the Mordens’ challenges to the summary judgment against them and the denial of their motion to amend. The Court therefore affirmed summary judgment against the Mordens on their claims and the denial of their motion to amend. View "Morden v. XL Specialty Insurance" on Justia Law

A former small-town doctor, defendant Joel Miller, was charged with multiple counts of health-care fraud, money laundering, and distributing a controlled substance outside the usual course of professional treatment, as well as one count of making a false statement on an application submitted to the Drug Enforcement Administration. A jury acquitted him on all of the financial charges as well as several of the drug distribution charges, but found him guilty on seven counts of distributing a controlled substance, and one count of making a false statement to the DEA. The district court granted Defendant’s post-judgment motion for acquittal on one of the controlled-substances counts based on an error in the indictment. The court then sentenced him to forty-one months of imprisonment on the six remaining distribution counts, plus a consecutive sentence of nineteen months on the false-statement count, for a total sentence of sixty months of imprisonment. Defendant appealed his convictions and sentence. The Tenth Circuit found no error in the imposition of defendant’s sentence on the six distribution counts; however the Court reversed and remanded on the false statement count. The Court was persuaded that trial court proceedings “broadened the possible bases for conviction beyond those found in the operative charging document. …we are persuaded that the trial proceedings in this case effected a constructive amendment.” View "United States v. Miller" on Justia Law

A former small-town doctor, defendant Joel Miller, was charged with multiple counts of health-care fraud, money laundering, and distributing a controlled substance outside the usual course of professional treatment, as well as one count of making a false statement on an application submitted to the Drug Enforcement Administration. A jury acquitted him on all of the financial charges as well as several of the drug distribution charges, but found him guilty on seven counts of distributing a controlled substance, and one count of making a false statement to the DEA. The district court granted Defendant’s post-judgment motion for acquittal on one of the controlled-substances counts based on an error in the indictment. The court then sentenced him to forty-one months of imprisonment on the six remaining distribution counts, plus a consecutive sentence of nineteen months on the false-statement count, for a total sentence of sixty months of imprisonment. Defendant appealed his convictions and sentence. The Tenth Circuit found no error in the imposition of defendant’s sentence on the six distribution counts; however the Court reversed and remanded on the false statement count. The Court was persuaded that trial court proceedings “broadened the possible bases for conviction beyond those found in the operative charging document. …we are persuaded that the trial proceedings in this case effected a constructive amendment.” View "United States v. Miller" on Justia Law

This appeal involved the extent of a duty to defend under a “professional services” policy of liability insurance issued to a law firm. The issue arose when the law firm was confronted with allegations of overbilling. The insurer, Evanston Insurance Company, defended the law firm, The Law Office of Michael P. Medved, P.C., under a reservation of rights but ultimately concluded that the allegations of overbilling fell outside the law firm’s coverage for professional services. The law firm disagreed with this conclusion; the district court agreed with the insurer. The Tenth Circuit concurred with the district court and affirmed summary justment in favor of Evanston on all claims and counterclaims. View "Evanston Insurance v. Law Office Michael P. Medved" on Justia Law

This appeal involved the extent of a duty to defend under a “professional services” policy of liability insurance issued to a law firm. The issue arose when the law firm was confronted with allegations of overbilling. The insurer, Evanston Insurance Company, defended the law firm, The Law Office of Michael P. Medved, P.C., under a reservation of rights but ultimately concluded that the allegations of overbilling fell outside the law firm’s coverage for professional services. The law firm disagreed with this conclusion; the district court agreed with the insurer. The Tenth Circuit concurred with the district court and affirmed summary justment in favor of Evanston on all claims and counterclaims. View "Evanston Insurance v. Law Office Michael P. Medved" on Justia Law

In 2010, the Kansas Disciplinary Administrator filed a formal complaint against plaintiff-appellant Phillip Kline for violations of the Kansas Rules of Professional Conduct (KRPC). A panel held a disciplinary hearing in two phases from February to July 2011. In October, it released a 185-page report finding multiple violations of the KRPC. It recommended an indefinite suspension from the practice of law. Kline filed exceptions to the report. The case went to the Kansas Supreme Court. In May 2012, Kline moved to recuse five justices based on participation in earlier cases involving him, arguing recusal would “not hinder [his] appeal from being heard” because “the Supreme Court may assign a judge of the court of the appeals or a district judge to serve temporarily on the supreme court.” The five justices voluntarily recused. In November 2012, Kline argued his case before the Kansas Supreme Court. In October 2013, the court found “clear and convincing evidence that Kline committed 11 KRPC violations.” It ordered indefinite suspension. In February 2014, Kline moved to vacate or dismiss the judgment, claiming the court was unlawfully composed because Justice Biles lacked authority to appoint replacement judges. The Clerk of the Kansas Appellate Courts did not docket the motion because the case was closed. In March, Kline petitioned for certiorari in the United States Supreme Court, alleging due process and free speech violations. The Supreme Court denied the petition. In October 2015, Kline sued in federal district court, asserting ten counts for declaratory and injunctive relief under 42 U.S.C. 1983. Counts one through nine attacked the Kansas Supreme Court’s decision. Count ten was a “prospective challenge” to the “unconstitutionally vague” Kansas Supreme Court Rule 219. The district court dismissed count three as a non-justiciable political question. It dismissed the other nine counts for lack of subject matter jurisdiction under the Rooker-Feldman doctrine. Kline appealed, but finding no reversible error in the district court's judgment, the Tenth Circuit affirmed. View "Kline v. Biles" on Justia Law