Sanctions hit lawyer Glen Lerner where it hurts most

Sanctions by a federal judge in New Orleans knocked Lerner off hundreds of cases involving the British Petroleum oil spill in 2010, meaning his clients there had to find a new attorney. The sanctions hit the heavy hitter where it hurts — no clients, no fees.

The State Bar of Nevada is already investigating the attorney, whose ads swamp the television airwaves.

When I last wrote about Lerner’s woes in September 2013, a special master had recommended booting Lerner and three other Louisiana attorneys from representing oil spill clients or getting fees. Special Master Louis Freeh, former FBI director, came down hard on Lerner, and at that time, Lerner’s Las Vegas attorney Dominic Gentile denied any misconduct and said Lerner looked forward to addressing the facts.

Judge Carl Barbier listened to the facts at an evidentiary hearing Nov. 7.

On Feb. 26, he sanctioned Lerner, Jon Andry and Lionel Sutton. Only Lerner does business in Nevada. Despite Freeh’s recommendation, Sutton’s wife was not sanctioned.

Lerner, Andry and Sutton were friends who all attended Tulane Law School in New Orleans. Lerner and Andry formed a law firm to handle victims of the oil spill.

Sutton was a former attorney who worked for the settlement program, and Freeh said the Andry Lerner law firm sought to put their clients at the head of the settlement list so they would get paid faster.

Lerner formed a company called Crown LLC and paid Sutton $10,000 a month and referral fees of $40,640. The money went through Lerner’s Las Vegas office and eventually to Sutton.

The judge said Lerner “knew or should have known, that it was a conflict of interest for him to be a business partner of Lionel Sutton in a company called Crown LLC and to be making substantial monthly payments to Sutton while again, he was seeking Sutton’s help in getting his claims paid.”

The judge wrote Lerner’s only defense is that “I just asked Mr. Sutton if it was a conflict of interest and he said no, so I thought it was OK.” The judge continued, “Lerner cannot escape his own responsibility for his ethical lapse by not enquiring further.”

Barbier disqualified the attorneys and their law firms from representing or collecting fees from any BP cases, except for work already performed. The judge also said Sutton, Andry and Lerner violated professional rules of conduct involving “dishonesty, deceit and misrepresentations.”

All three violated another professional conduct rule by “assisting each other in violating the Rules of Professional conduct.”

Lerner did catch a few breaks. Unlike Andry and Sutton, he wasn’t accused of making false statements (aka lying) during Freeh’s investigation.

The judge also decided that the misconduct of the threesome “did not result in any corruption of the claim evaluation process.”

BP attorneys have challenged the legitimacy of numerous claims, including one of Andry Lerner’s clients, Casey Thonn, who pleaded guilty to cheating the settlement fund out of $357,000 in a criminal case. He will be sentenced June 2.

Lerner’s attorney, Gentile, wrote the order is on appeal and pointed out the judge did not find that Lerner did anything in an active sense. “He found that Glen was vicariously liable for the acts of Jon Andry and, in addition thereto, that he shouldn’t have believed Sutton and should have realized that there could be an appearance of impropriety, even if it wasn’t a reality, because Sutton had an interest in an unrelated business with Glen.”

Gentile continued: “The issue of vicarious liability for the ethical breaches of another lawyer without establishing actual knowledge or intent is one that the entire legal community needs clarified. It is novel, to say the least, and requires a level of vigilance on the part of a lawyer that, while perhaps inspirational, is not workable in any profession.”

David Clark, the head of the State Bar of Nevada told me recently that the bar opened a file on Lerner in January 2014 but he was waiting for the written decision. The issue of potential disciplinary action against Lerner in Nevada is still being briefed, the bar counsel said. He estimated it would be another two to three months before the bar’s investigation is concluded.

Meanwhile, it appears Lerner’s defense rests on blaming Andry and claiming ignorance.

Who knows, it could work.

Jane Ann Morrison’s column appears Thursdays. Email her at jmorrison@reviewjournal.com or leave a message at 702-383-0275. Find her on Twitter: @janeannmorrison