In the Matter of Scapa and Brown (1993)

Overview

This case is a leading State Bar Court decision addressing large-scale personal injury client solicitation through non-lawyer “runners,” unlawful fee-sharing arrangements, and the use of coercive and unconscionable fee provisions. The Review Department imposed significant actual suspension after finding that respondents knowingly operated a business model built on illegal solicitation and overreaching fee practices.

Facts

Respondents were partners in a Southern California plaintiff personal injury firm who opened a Northern California branch office in San Bruno to expand their client base. The branch office was largely staffed by non-lawyers, with respondents present only about one day per week. To generate cases, respondents retained non-lawyer independent contractors—most notably Robert Buchanan and Joseph Gumban—whose primary role was to “sign up” accident victims.

These contractors obtained police accident reports through illegal cash payments to police department employees and used the information to contact accident victims directly, often within days of an accident. They met prospective clients in homes or restaurants and presented respondents’ retainer agreements for signature without attorney involvement. In at least one instance, a victim was contacted minutes after returning home from emergency medical treatment.

Respondents’ retainer agreement was complex and internally inconsistent. Although framed as a contingency agreement, it provided that if a client discharged respondents, respondents would still be entitled either to their full contingent fee or, at minimum, three hours of attorney time at a $200 hourly rate—regardless of the actual work performed. Clients were also asked to sign a sworn declaration stating they had not been solicited, a practice criticized as unethical “file papering.”

Respondents paid the contractors almost entirely in cash, with payments tied to the perceived value of the case and whether the firm ultimately accepted it. No records were kept of these payments. Contractors also referred clients to a favored medical clinic that paid kickbacks to the contractors.

When multiple clients discharged respondents and retained new counsel, respondents asserted attorney-fee liens far exceeding the reasonable value of services performed. In several cases, respondents threatened successor counsel and insurers with punitive damage actions unless the liens were honored, even where respondents’ work was limited to opening a file and sending form letters. Some clients were unable to repair damaged vehicles or resolve claims due to these lien assertions.

Charges

Defenses

Respondents argued they were unaware of their contractors’ solicitation activities and believed the contractors were legitimate investigators or referral sources. They asserted that, at most, the evidence showed inadequate supervision rather than knowing participation in solicitation. They also raised numerous procedural challenges to the notice to show cause, discovery practices, evidentiary rulings, and the State Bar’s investigative conduct.

Mitigating and Aggravating Factors

• Mitigation: No prior discipline; favorable character testimony; later changes to office practices.
• Aggravation: Multiple acts over an extended period; systematic solicitation; overreaching fee practices; harm to clients; corruption through runner-based business model.

Outcome

The Review Department rejected respondents’ procedural and evidentiary challenges and found the misconduct proven by clear and convincing evidence. It concluded that respondents knowingly authorized and benefited from illegal solicitation, shared fees with non-lawyers, and attempted to enforce unconscionable fee provisions, constituting moral turpitude under section 6106.

Finding the hearing judge’s recommended discipline inadequate, the Review Department increased the actual suspension to reflect the seriousness and scope of the misconduct.

Sanctions Table