In the Matter of Jacques C. Chen

Facts Leading to Discipline

Jacques C. Chen was the subject of a State Bar disciplinary proceeding that ultimately resolved through a negotiated stipulation as to facts and discipline. Prior to final resolution, Chen and the Office of the Chief Trial Counsel (“OCTC”) participated in a series of voluntary settlement conferences before a settlement judge pro tempore in January 1992.

At the conclusion of the final settlement conference on January 13, 1992, the settlement judge issued a written order stating that the parties had reached a final compromise as to facts, culpability, and disposition. The order directed OCTC to prepare a written stipulation memorializing the agreement. One material term discussed at the conference was that Chen’s nine-month period of actual suspension would be deemed to have commenced as of his voluntary transfer to inactive status in February 1992.

Despite the settlement judge’s order, OCTC later disavowed the agreement, asserting that discipline could not take effect prior to the Supreme Court’s order. OCTC declined to prepare the ordered stipulation and instead proposed new settlement terms that eliminated retroactive commencement of the actual suspension. As a result, the disciplinary case did not resolve until June 1992, with the Supreme Court’s order issuing in December 1992 and Chen’s actual suspension commencing in January 1993—nearly one year after the original settlement conference.

During the interim, OCTC filed an unsuccessful pretrial motion seeking to exclude evidence and strike correspondence related to the settlement dispute. A hearing judge denied that motion and criticized OCTC’s legal authorities. Chen ultimately accepted the revised settlement due to financial constraints and thereafter sought relief from disciplinary costs, arguing that OCTC’s conduct amounted to bad faith and caused unnecessary expense.

Charges / Procedural Posture

This matter did not concern new substantive charges of professional misconduct. Instead, it arose from Chen’s petition for relief from disciplinary costs under Business and Professions Code section 6086.10, following the Supreme Court’s disciplinary order.

Chen contended that OCTC’s refusal to honor the court-ordered settlement agreement and its filing of an improper pretrial motion constituted bad-faith litigation tactics warranting reduction or elimination of assessed costs.

Defenses and Arguments Raised

Chen argued that:

• The January 13, 1992 settlement conference resulted in a binding settlement, as reflected in the settlement judge’s written order;
• OCTC violated its statutory duties by failing to comply with a court order and by disavowing the settlement without seeking relief;
• OCTC’s conduct caused unnecessary delay and forced Chen to incur substantial additional attorney’s fees;
• The hearing judge abused her discretion by declining to address OCTC’s alleged bad faith when denying full relief from costs.

Chen relied on principles governing enforcement of settlement agreements, including analogies to Code of Civil Procedure section 664.6, and argued that prosecutors should be held to the same ethical standards as other attorneys.

Court’s Ruling

The Review Department applied an abuse of discretion standard to the hearing judge’s ruling on cost relief. While the court strongly criticized OCTC’s conduct—finding that the January 13 settlement was binding and that OCTC’s refusal to honor the settlement order violated statutory duties—it nonetheless affirmed the denial of further relief from costs.

The Review Department held that although Chen could have pursued enforcement of the original settlement agreement through a motion to compel or by asserting it as an affirmative defense, the remedy he sought—offsetting attorney’s fees against disciplinary costs—was not authorized by statute. Business and Professions Code section 6086.10 expressly excludes attorney’s fees from recoverable costs, and “good cause” for cost reduction could not be interpreted to permit such an offset absent legislative or Supreme Court authorization.

Accordingly, while OCTC’s conduct was admonished and described as inconsistent with its ethical obligations, the Review Department concluded that Chen was not entitled to additional relief from disciplinary costs.

Outcome

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