Argued February 29, 1960
Decided April 1, 1960
Appeal from the Appellate Division of the Supreme Court in the Second Judicial Department.
Theodore Kiendl and David F. Price for appellant. Denis M. Hurley, in person, Michael A. Castaldi and Michael Caputo for Denis M. Hurley, respondent. Leonard B. Boudin for New York State Association of Plaintiffs' Trial Lawyers, amicus curiae. Emanuel Redfield for New York Civil Liberties Union, amicus curiae. David Scribner, Jonathan R. Goldberg and Herman B. Gerringer for National Lawyers Guild, amicus curiae. Henry Weiner, Allen Harris and Daniel J. McMahon for Co-ordinating Committee on Discipline of the Association of the Bar of the City of New York and others, amici curiae.
By an order of the Appellate Division, Second Department (one Justice dissenting) petitioner, admitted to the Bar in 1922, has been disbarred from the practice of law. The disbarment order was made after a hearing and on findings that he had refused to answer pertinent questions put to him during a "Judicial Inquiry and Investigation" (Judiciary Law, § 90) ordered by the Appellate Division and held before a Supreme Court Justice assigned by that court. The "Inquiry and Investigation" was concerned with charges of alleged illegal, corrupt and unethical practices and of alleged conduct prejudicial to the administration of justice, by attorneys and others acting with them, in the County of Kings, where appellant had his law office. Appellant's refusal to answer was on the stated ground that the answers might tend to incriminate him. On this appeal he argues that the disbarment order was, contrary to law and in violation of his right to due process of law, made solely because of his refusing to answer questions, in good-faith reliance on his constitutional privilege (N.Y. Const., art. I, § 6) against self incrimination. The Appellate Division held that he was not disciplined for invoking his constitutional privilege but because, in his capacity and status as a lawyer, he had deliberately breached his inviolable and absolute duty to co-operate with the court in a valid and proper investigation of unethical practices. A lawyer, wrote the Appellate Division, "cannot remain mute, thereby sterilizing the power of the court and frustrating its inquiry into unethical practices, and yet be permitted to retain his privilege of membership in an honorable profession."
There is no dispute as to the facts and no real dispute as to the legality of this kind of general investigation or "Judicial Inquiry" (Judiciary Law, § 90; People ex rel. Karlin v. Culkin, 248 N.Y. 465). On two occasions appellant appeared before the Supreme Court Justice presiding at the inquiry. He was represented by his own counsel. The counsel for the inquiry explained the nature of and authority for the inquiry. Appellant and his attorney were informed by the inquiry's counsel and by the court that this was an investigation and not an adversary proceeding (see Anonymous v. Baker, 360 U.S. 287, 291; People ex rel. Karlin v. Culkin, 248 N.Y. 465, 479, supra), that there were no respondents or defendants, that appellant was "not being charged with anything" but was to be questioned as to pertinent facts "within the scope of the Inquiry" and which were thought to "bear on or relate to your professional conduct", also that counsel for the inquiry had "information that indicates your participation in professional misconduct".
Counsel for the inquiry then put into evidence 228 "Statements of Retainer" which during the years 1954 through 1958 appellant had filed with the Appellate Division in obedience to its Special Rule 3 which requires that an attorney who makes contingent-fee agreements for his services in personal injury, wrongful death, property damage, and certain other kinds of cases, must file such agreements with the court and, if he enters into five or more such agreements in any year, must give to the court in writing certain particulars as to how he came to be retained. Put into evidence, also, when appellant appeared before the judicial inquiry were 76 other such statements of retainer filed during the same period by the law firm of Cohen Rothenberg, with which appellant apparently had some association. Counsel for the inquiry informed appellant and the court that all these retainer statements were offered in evidence "as a basis for some of the questions to follow".
Appellant answered a few preliminary questions as to how long and where he had practiced law. About 60 other questions were asked of him during the two days (six months apart) on which he was on the witness stand but, on advice of his counsel who was present in court, he refused to answer any of them (except questions as to whether he had failed in any case to comply with Special Rule 3 and except as to questions about maintaining a separate office bank account) on the ground that answers might tend to incriminate or degrade him or expose him to a penalty or forfeiture. Those unanswered questions related to the identity of his law office partners, associates and employees, to his possession of the records of the cases described in his statements of retainer, to any destruction of such records, to his bank accounts, to his paying police officers or others for referring claimants to him, to his paying insurance company employees for referring cases to him, and to his promising to pay to any "lay person" 10% of recoveries or settlements. He was asked — and refused to answer — as to whether he had made or agreed to make such payments to any of several named persons, as to whether he had hired or paid nonlawyers to arrange settlements of his cases with insurance companies and as to whether his partner or associate Rothenberg had been indicted for and had pleaded guilty to violations of sections 270-a and 270-d of the Penal Law which forbid the solicitation of legal business or the employment by lawyers of such solicitors. At one stage of this questioning counsel for the inquiry pointedly called to appellant's attention section 90 of the Judiciary Law which gives the Appellate Divisions power and control over lawyers and authority to punish professional misconduct or conduct prejudicial to the administration of justice. At that time the inquiry's counsel cited Canon 22 of Professional Ethics requiring lawyers to be candid and frank when before the court, Canons 28 and 29 forbidding the payment of awards to persons bringing in legal business and requiring lawyers knowing of such practices to inform the court thereof, Canon 34 outlawing division of fees except with other lawyers; also sections 270-a, 270-c, 270-d and 276 of the New York Penal Law, all relating to soliciting and fee splitting. Counsel for the inquiry warned appellant and his counsel that "serious consequences" might flow from his refusal to answer by way of a "recommendation to the Appellate Division." Appellant's counsel replied that he was relying on Matter of Grae ( 282 N.Y. 428) and Matter of Ellis ( 282 N.Y. 435) as holding that there could not be any "consequence" to lawyers for "doing what they had an absolute legal right to do". Appellant was given a further opportunity to answer but persisted in his refusal, all this being admitted in his pleading in this proceeding.
The Supreme Court Justice presiding at the judicial inquiry then filed with the Appellate Division a transcript of the proceedings before him with a recommendation that disciplinary proceedings be instituted against appellant. The Appellate Division directed respondent Hurley, counsel to the inquiry, to commence this disbarment proceeding. Appellant's answer says that there is only an issue as to whether he was within his rights under section 6 of article I of the New York State Constitution, in pleading the privilege. The case, however, is not so simple. Of course, he had the right to assert the privilege and to withhold the criminating answers. That right was his as it would be the right of any citizen and it was not denied to him. He could not be forced to waive his immunity ( Matter of Ellis, 282 N.Y. 435, supra). But the question still remained as to whether he had broken the "condition" on which depended the "privilege" of membership in the Bar (see Judge CARDOZO in Matter of Rouss, 221 N.Y. 81, 84). "Whenever the condition is broken, the privilege is lost" ( Matter of Rouss, supra, pp. 84-85). Appellant as a citizen could not be denied any of the common rights of citizens. But he stood before the inquiry and before the Appellate Division in another quite different capacity, also. As a lawyer he was "an officer of the court, and, like the court itself, an instrument * * * of justice" (Chief Judge CARDOZO in People ex rel. Karlin v. Culkin, 248 N.Y. 465, 470-471, supra), with the inevitable consequences that the court which was charged with control and discipline of its officers had its own right to demand his full, honest and loyal co-operation in its investigations and to strike his name from the rolls if he refused to co-operate. Such "co-operation" is a "phrase without reality" as Chief Judge CARDOZO wrote in People ex rel. Karlin v. Culkin ( supra, p. 471) if a lawyer after refusing to answer pertinent questions about his professional conduct can retain his status and privileges as an officer of the court.
The solution to our problem is clear when we consider the lawyer's special position. "The court's control over a lawyer's professional life derives from his relationship to * * * the court" ( Theard v. United States, 354 U.S. 278, 281). "Membership in the bar is a privilege burdened with conditions" ( Matter of Rouss, 221 N.Y. 81, 84, supra). Those conditions must not be arbitrary but the proper and appropriate ones are numerous. An attorney's contractual right to collect as fees a percentage of settlements or recoveries may validly be limited by court rule ( Gair v. Peck, 6 N.Y.2d 97, cert. denied 361 U.S. 374). He may be required to represent, without fee, indigent defendants. He cannot solicit retainers or employ others to solicit them for him, or divide his fees with laymen (Penal Law, §§ 270-a, 270-b, 270-c, 270-d, 276). If he knows of such practices by others, he must inform the court (Canon 29). He must be candid and frank with the court at all times (Canon 22). Not only must he meet educational requirements and prove his character and fitness before being admitted to the Bar but he is subject throughout his professional life to investigation as to whether he continues in the possession of those qualities (Judiciary Law, § 90).
The key word is "duty" and the imposition on a lawyer by tradition and positive law of strict and special duties produces this situation where, at the very time that he is exercising a common privilege of every citizen in refusing to answer incriminating inquiries, he is failing in his duty as a lawyer and endangering his professional life. Breach of the special duty brings a special penalty. Lawyers are not the only citizens whose duty to answer is inconsistent with the exercise of the constitutional privilege. So it is with police officers ( Christal v. Police Comm., 33 Cal.App.2d 564; Canteline v. McClellan, 282 N.Y. 166) and with certain other public employees ( Matter of Lerner v. Casey, 2 N.Y.2d 355, affd. 357 U.S. 468; Beilan v. Board of Educ., 357 U.S. 399). The latest in this line of decisions is Nelson v. Los Angeles County ( 362 U.S. 1). Nelson and Globe had been ordered by their employer, the county, to answer any questions asked of them by a Congressional subcommittee before which they had been subpoenaed. There was a California statute making it the duty of any public employee so subpoenaed to answer any questions as to his membership in any organization advocating the forceful overthrow of the United States Government, etc. Nelson and Globe refused to answer the subcommittee's questions on Fifth Amendment grounds and they were thereupon discharged from their county employment. The United States Supreme Court, following Beilan and Lerner ( supra), held that they had been validly separated from their employment not for invoking their constitutional privilege but for insubordination under California law. The majority opinion in the Supreme Court stated that, if these men had simply refused without more to answer the subcommittee's questions, the county could certainly have discharged them and the fact that they chose to place their refusal on a Fifth Amendment claim put the matter in no different posture since their assertion of that claim was not used as a basis for drawing an inference of guilt. In those cited cases the duty to co-operate in investigations by answering relevant questions was found in statutes or constitutions. The lawyer's duty is found elsewhere — in the common law and in the Canons of Ethics — but it is just as plainly written. In this State a lawyer on admission to the Bar takes the same oath as does a public official (see Judiciary Law, § 466).
The idea that invocation of basic constitutional rights may result, for other reasons, in forfeiture of office or privilege is not a new one. Justice HOLMES' aphorism has become famous: "The petitioner may have a constitutional right to talk politics, but he has no constitutional right to be a policeman" ( McAuliffe v. New Bedford, 155 Mass. 216, 220). The Federal Hatch Act, denying to governmental employees their right of political activity, on pain of dismissal, has been held valid ( United Public Workers v. Mitchell, 330 U.S. 75).
Appellant's reliance is on Matter of Grae ( 282 N.Y. 428, supra); Matter of Ellis ( 282 N.Y. 435, supra); Matter of Solovei ( 276 N.Y. 647) and Matter of Kaffenburgh ( 188 N.Y. 49). None of those decisions controls us here. The precise question in Grae and Ellis ( supra) was as to whether a lawyer who offered to answer all pertinent questions could be compelled in such an investigation to waive immunity in advance of questioning. The holding in each case was that a lawyer like every other citizen is constitutionally privileged not to answer damaging questions. The difference between those cases and the present one may seem slight but it is enough to permit a fresh examination (or re-examination) of the question now directly presented. Likewise as to Kaffenburgh and Solovei ( supra): Kaffenburgh's refusal to testify was at a criminal trial (so in Matter of Cohen, 115 App. Div. 900) and Solovei's was before a grand jury. Our present appellant by declining to answer may have escaped criminal prosecution and punishment, but he could never, while a member of the Bar, escape the other consequences of his flagrant breach of his absolute duty to the court whose officer he was. That breach was in itself "professional delinquency" ( Ex parte Garland, 71 U.S. 333, 379) and a valid reason for depriving appellant of his office as attorney.
The order appealed from should be affirmed, without costs.
In order to appreciate the force of today's decision, it must be borne in mind that we are concerned not with the necessarily vague contours of the Due Process Clause of the Federal Constitution, but with the specific provision of the Constitution of this State that no person shall be compelled to be a witness against himself (art. I, § 6). Recent Supreme Court decisions ( Lerner v. Casey, 357 U.S. 468; Beilan v. Board of Educ., 357 U.S. 399; and Nelson v. Los Angeles County, 362 U.S. 1), whatever their bearing on the present problem, are, therefore, not dispositive of this case. In other words, whether or not this disbarment violates federal constitutional guarantees — and for reasons previously expressed (e.g., Matter of Lerner v. Casey, 2 N.Y.2d 355, 373, dissenting), I believe that it does — we need not resolve the federal question. The case before us may and should be decided, as were Matter of Grae ( 282 N.Y. 428) and Matter of Ellis ( 282 N.Y. 435), on an interpretation of our own Constitution, article I, section 6.
I agree that "strict and special duties" have been imposed on a lawyer (opinion, p. 496). I cannot, however, persuade myself that a lawyer's refusal to answer questions, even before a judicial inquiry, on the constitutionally permissible ground that to do so would incriminate him, may be said to constitute a violation of any such duty. (See Matter of Grae, 282 N.Y. 428, supra; Matter of Ellis, 282 N.Y. 435, supra; see, also, People ex rel. Karlin v. Culkin, 248 N.Y. 465, 471.) In the Grae and Ellis cases, the court held that under our State Constitution an attorney's refusal to sign a waiver of immunity — his refusal to forego reliance on the privilege — could not constitute a ground for disbarment, even though the refusal occurred during the course of a judicial inquiry similar to the one which here concerns us. There, too, it was argued that failure to answer was a violation of the lawyer's duty of co-operation with the court. We rejected that argument and, in the words of Presiding Justice LAZANSKY who had dissented in the Appellate Division, forthrightly declared that (282 N.Y., at p. 435)
Indeed, in the Ellis case ( 282 N.Y. 435, supra), the court pointed out that Ellis, "appearing as a witness at the inquiry, not only declined to sign a waiver of immunity * * * but in addition * * * declined to answer any questions upon the ground that such answers would tend to incriminate or degrade him" (p. 437; see, also, 258 App. Div., at p. 559). Although Ellis later wrote a letter stating that, while he stood upon his refusal to sign a waiver, he was "willing" to answer questions put to him, the significant fact is not only that he never did appear as a witness, but that his refusals to answer questions went unpunished.
"'The constitutional privilege is a fundamental right and a measure of duty; its exercise cannot be a breach of duty to the court.'"
And, therefore, concluded the court (p. 435),
"It follows that * * * the present disciplinary proceeding instituted against the appellant, wherein the single offense charged is his refusal to yield a constitutional privilege, is unwarrantable."
The attorneys Grae and Ellis ultimately offered to answer all questions put to them, but, the record makes clear, the offer was based not on a surrender of immunity, but on the specific condition that immunity be granted — by their being compelled to answer questions that might incriminate them. It was for the very reason that the court was unwilling to have immunity conferred on them that it declined to put questions to them without first obtaining a waiver of immunity. Analysis of our opinion, as well as the dissent of Presiding Justice LAZANSKY (258 App. Div., at pp. 567-575) — which this court explicitly approved (282 N.Y., at p. 434) — demonstrates that this court was not merely passing on the consequences of a momentary lapse of courtesy, but was deciding the very point in issue today. Pointedly noting that "the single offense charged [against Grae] is his refusal to yield a constitutional privilege", the court unequivocally announced that "its exercise cannot be a breach of duty to the court" (282 N.Y., at p. 435).
The attorneys who refused to sign waivers of immunity in those proceedings were not, I am confident, any more co-operative or any more mindful of their "strict and special duties" or of their privileged posts in the affairs of men than the present appellant. And, I venture, the motives which prompted Grae and Ellis to assert their privilege were no different from those of the appellant.
Nor do Matter of Grae and Matter of Ellis stand alone in holding that an attorney's claim of privilege may not be treated as professional misconduct warranting disciplinary action.
The question now before us first came to this court in 1907 in Matter of Kaffenburgh ( 188 N.Y. 49). Kaffenburgh was called as a witness on the trial of his employer for conspiracy to obstruct justice. He was asked questions relating to his possible participation in the conspiracy and declined to answer on constitutional grounds. This was one of the charges on which his disbarment was later sought, and as to it this court wrote (p. 53): "The defendant * * * had the right to refrain from answering any question which might form the basis of or lead to the prosecution of himself or a forfeiture of his office of attorney and counselor at law. * * * We are, therefore, of the opinion that no offense was stated in the first charge". The court's opinion herein attempts to distinguish Kaffenburgh upon the ground that it involved a trial and not an inquiry into the conduct of lawyers. In point of fact, it was the most serious kind of inquiry into the conduct of lawyers, taking, as it did, the form of a criminal prosecution. The questions put to Kaffenburgh dealt solely with his conduct in the practice of the law and, certainly, he was as much an officer of the court conducting the trial as the appellant here was of the court conducting the judicial inquiry.
Ten years later came Matter of Rouss ( 221 N.Y. 81), also cited by the majority. That decision, far from overruling Kaffenburgh on this point, actually confirmed it, for the court explicitly declared that "the charge was made that the refusal to answer was professional misconduct. That charge was not sustained either in the Appellate Division or in this court" (p. 90).
Twenty years after Rouss came Matter of Solovei ( 276 N.Y. 647, affg. 250 App. Div. 117). As a result of asserted irregularities in connection with a murder investigation in which the respondent therein represented one of the suspects, the Governor appointed an Extraordinary Special and Trial Term of the Supreme Court and a grand jury was drawn for that term. It indicted three persons for murder and, some time later, it also indicted certain others, including an office associate of the respondent, for the crime of conspiracy to obstruct justice. The respondent, named as a coconspirator, declined to waive immunity when questioned by the grand jury. That body thereupon presented charges to the Appellate Division. That court dismissed the charges, stating that " Matter of Kaffenburgh * * * decided that an attorney who in good faith refused to answer questions on the ground that they might tend to incriminate him was not amenable to disciplinary proceedings" (250 App. Div., at p. 121). The Appellate Division also commented on the nature of the proceedings, noting that, if it was not a breach of duty to the court to refuse to co-operate with it in a public trial, as in Kaffenburgh, it was surely no breach to claim the privilege in a private hearing (p. 120). As indicated, we affirmed without opinion.
Although the court in this case places considerable reliance upon People ex rel. Karlin v. Culkin (opinion, p. 495), it is noteworthy that that case did not involve a claim of privilege; the attorney simply refused to be sworn or testify. In affirming an order adjudging him in contempt, the court spoke of the duty of "co-operation" owed by an attorney in an inquiry such as the present, but it was careful to indicate that such "co-operation" on the part of the lawyer was "subject to his claim of privilege" (248 N.Y., at p. 471).
It is hardly necessary to say that a scrupulous regard for the constitutional limitation will not leave the disciplinary authority powerless or a guilty attorney immune. If, as counsel for the judicial inquiry stated toward the conclusion of the investigation, there was information indicating the appellant's "participation in professional misconduct", his unwillingness to testify might have justified institution of a disciplinary proceeding founded on the information at hand. And, if such proceeding were to be brought and the appellant were to stand mute therein, he would have to bear all of the legitimate inferences stemming from the damaging evidence adduced against him. It is also relevant that, where immunity is conferred — by overriding the claim of privilege and compelling the witness to answer the questions — and the testimony shows that he is not fit to continue as a lawyer, he may then be disbarred or otherwise disciplined. (See Matter of Rouss, 221 N.Y. 81, 86 et seq., supra.)
In the present case, however, the appellant's claim of privilege was the sole ground relied upon to disbar him, and this fact cannot be altered or disguised by styling his conduct a "refusal to co-operate with the court". It is to substance that we must look, not to form or labels. The courts should not sanction so easy an avoidance of a constitutional guarantee of a fundamental personal right.
To the charge that it is unthinkable that a lawyer "can retain his status and privileges as an officer of the court" after claiming his privilege (opinion, p. 495), I would answer, as did Mr. Justice LAZANSKY in his dissent in Matter of Ellis ( 258 App. Div. 558, 573, supra), that the charge "is based upon false assumption. Defiance and affront there cannot be when the act has the sanction of the fundamental law of the land". It is, in short, my view that not only section 6 of article I of our Constitution but the decisions of this court considering and construing it require us to set aside the order of disbarment. Failure to do so can only mean that time has eroded the importance and vitality of the constitutional privilege against self incrimination.
I would reverse the order of the Appellate Division.
Judges DYE, FROESSEL, VAN VOORHIS, BURKE and FOSTER concur with Chief Judge DESMOND; Judge FULD dissents in a separate opinion.