Sheller v. Superior Court
71 Cal. Rptr.3d 207 (2008)
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Rule of Law:
A California trial court's inherent authority over an out-of-state attorney appearing pro hac vice is coextensive with its authority over California attorneys. The court may revoke pro hac vice status under the same conditions it would disqualify a local attorney, but it lacks the authority to impose monetary sanctions (attorney's fees) or formal reprimands, as such disciplinary powers are exclusively held by the State Bar and the California Supreme Court.
Facts:
- Attorney David L. Sheller, a Texas lawyer, was granted pro hac vice status to serve as lead counsel for plaintiffs in a class action lawsuit against Farmers New World Life Insurance Company (Farmers) in California.
- The trial court expressed concern that the initial named plaintiff, Pauline Fairbanks, was not an ideal class representative because she was also a Farmers agent.
- In June 2005, Sheller sent a flyer to approximately 350 Farmers policyholders to recruit additional class representatives.
- The flyer falsely suggested Farmers had sent misleading information to policyholders about the lawsuit.
- The flyer also contained the misrepresentation that potential class representatives, if accepted, would be 'paid for your time in an amount set by the judge.'
- When initially questioned by the court, Sheller stated his client retainer agreement made clients liable for court costs if the case was lost.
- Later in the proceedings, Sheller's co-counsel presented a letter, not previously disclosed, suggesting Sheller had agreed to indemnify the plaintiff for all costs, directly contradicting Sheller's earlier representation to the court.
Procedural Posture:
- Pauline Fairbanks and others filed a class action lawsuit against Farmers New World Life Insurance Company in California Superior Court, a trial court.
- The court granted Texas Attorney David L. Sheller's application to appear pro hac vice as lead counsel for the plaintiffs.
- Farmers filed an ex parte motion for a temporary restraining order to stop Sheller from communicating with potential class members after he sent a misleading flyer.
- The trial court granted the restraining order and, on its own motion, issued an order to show cause why Sheller's pro hac vice status should not be revoked.
- Following a hearing, the trial court discharged the order to show cause but sanctioned Sheller by ordering him to pay $95,009 of Farmers's attorney's fees and issuing a formal reprimand as conditions for keeping his pro hac vice status.
- Attorney Sheller, the appellant, appealed the sanction order to the California Court of Appeal.
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Issue:
Does a California trial court have the inherent authority to sanction an attorney appearing pro hac vice for misconduct by ordering them to pay the opposing party's attorney's fees and issuing a formal reprimand, as conditions for retaining pro hac vice status?
Opinions:
Majority - Croskey, Acting P. J.
No. A California trial court does not have the inherent authority to sanction a pro hac vice attorney with monetary penalties or formal reprimands. An out-of-state attorney appearing pro hac vice is subject to the jurisdiction of California courts to the same extent as a member of the State Bar of California, not to a greater extent. Under established California Supreme Court precedent (Bauguess v. Paine), trial courts lack the inherent power to award attorney's fees as a sanction; such authority must be granted by statute. Similarly, formal reprimands constitute attorney discipline, a power exclusively held by the State Bar and the Supreme Court. While the court affirmed its inherent power to revoke pro hac vice status—which is analogous to disqualifying a California attorney—it held that it cannot impose sanctions on a pro hac vice attorney that it would be powerless to impose on a local one.
Analysis:
This decision clarifies the scope and limitations of a trial court's authority over out-of-state attorneys practicing pro hac vice in California. It establishes that the principle of equivalence governs: pro hac vice attorneys are subject to the same rules and sanctions as local attorneys, no more and no less. The ruling reinforces the division between a trial court's power to control proceedings before it (e.g., by disqualification or revocation) and the State Bar's exclusive jurisdiction over attorney discipline (e.g., reprimands, suspension). For future cases, this means a trial court's primary tool for addressing misconduct by a pro hac vice attorney is revocation of their status, while other disciplinary measures must be referred to the State Bar.
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