Fifth Circuit Upholds Sanctions Against ‘Nationwide’ Law Firm

In September, District Judge Elizabeth Erny Foote of Shreveport, La., upheld a plethora of sanctions and injunctions imposed on a self-described “national consumer law firm” by Bankruptcy Judge Jeffrey P. Norman.

The firm advertised nationally, used non-attorneys to perform intake over the telephone, persuaded clients to sign retainer agreements, collected retainers, and assigned the cases to attorneys presumably admitted to practice where the debtors were to file bankruptcy.

For violating the Bankruptcy Code and ethical rules at virtually every step in the process, Judge Norman imposed sanctions including the disgorgement of fees and suspension from practice for 90 days. Judge Foote affirmed. To read ABI’s report on her opinion, click here.

Despite a 69-page brief by the law firm making at least seven assignments of error, the Fifth Circuit upheld the lower courts in a one-paragraph, per curiam opinion on May 7.

Referring to the law firm’s “appalling conduct” in what “should have been a simple and straightforward bankruptcy matter,” the appeals court said that the firm “misled and neglected the debtor for approximately two years.”

The circuit court said that Judge Norman’s “well-reasoned memorandum opinion correctly disposed of” the matter, considering the firm’s “many rule violations and the egregious way that it mishandled the debtor’s case.”

The Fifth Circuit affirmed for “the reasons given by the bankruptcy and district courts.”