Brown v. Rico

826 F.Supp.2d 406

Herbert W. BROWN III, et al., Plaintiffs

v.COLEGIO DE ABOGADOS DE PUERTO RICO, Defendant.

Civil No. 06–1645(JP).

United States District Court, D. Puerto Rico.

April 13, 2011.Opinion Denying Motion to Amend May, 24, 2011.

Andres W. Lopez, Andres W. Lopez Law Office, Seth Erbe, Indiano & Williams, PSC, San Juan, PR, David C. Indiano-Vicic, Indiano & Williams, PSC, for Plaintiffs.

Harold D. Vicente-Gonzalez, Nelson N. Cordova-Morales, Vicente & Cuebas, San Juan, PR, for Defendant.

ORDER

JOSÉ ANTONIO FUSTÉ, Chief Judge.

Written on the building, where the Colegio de Abogados de Puerto Rico (“Colegio”) is located, is the phrase “Honrando la Toga.” The phrase means honoring the robe or honoring the legal profession. This phrase should be more than simply words; it should be what Colegio should strive to represent. Unfortunately, the actions of Colegio in this case have made it clear that these are just hollow words without any meaning to the Colegio of recent times.

The undersigned was admitted to practice law in 1968 and became a member of the Colegio as required by law. Those were the golden days of Colegio, when Colegio respected and valued its members. I have memorabilia of the many times I participated as a panelist in Colegio-sponsored seminars on matters of Federal jurisdiction and Admiralty law. Sadly, since 2002, Colegio's leadership has dug Colegio's grave. Through their actions they have actually dismantled the institution.

I.INTRODUCTION

This case arises from a life insurance program which Colegio required its members, all the attorneys authorized to practice in the Puerto Rico local courts, to take part in. In 2002, Judge Patti B. Saris determined, in Romero v. Colegio de Abogados de Puerto Rico, Civil Case No. 94–2503, that Colegio's act of requiring its members to take part in the life insurance program as a condition for practicing law violated the First Amendment of the United States Constitution.

To the surprise of all at that time,¹ Colegio ignored the decision of Judge Saris and continued violating the First Amendment rights of its members. Not only did Colegio continue to force its members to pay for the life insurance which was unlawful, but it also did not fully advise its members that they no longer had to purchase the insurance, threw obstacles in front of those trying to opt-out, delayed refunds, and even moved to disbar one individual who correctly refused to pay that portion of his dues attributable to the insurance program. Brown v. Colegio de Abogados de Puerto Rico, 613 F.3d 44, 49 (1st Cir.2010).

On June 27, 2006, Herbert W. Brown III, José L. Ubarri, and David W. Román (“Class Plaintiffs”) filed the instant action against Colegio. Thereafter, the Court certified two classes, one for declaratory relief and one for damages, and granted summary judgment for Class Plaintiffs finding that the Romero decision had preclusive effect in the instant action. The Court entered Final Judgment, which was later amended, finding that Colegio had violated the constitutional rights of its members and granting $4,156,988.70 in damages, plus costs, interest and attorney's fees.²

The First Circuit Court of Appeals issued an Opinion on July 23, 2010. In it, the First Circuit affirmed this Court's finding of liability, that Colegio violated its members' constitutional rights, and granting of injunctive relief. Moreover, it affirmed the classes certified in this case. However, the First Circuit vacated the Judgment insofar as it determined the amount of damages and ordered that class members be provided with notice including their right to opt-out. After the expiration of the notice period, the First Circuit authorized the Court to reinstate the damage award as calculated before but this time excluding damages otherwise attributable to those who opt-out of the class.

In full compliance with the First Circuit's Opinion, on September 2, 2010, the parties and the Court began the process of preparing a Class Action Notice to be issued to class members providing them with the Court-approved opt-out procedures. However, prior to the issuance of the Class Action Notice and to the Court approving the procedures for opting-out, Colegio began issuing communications (Nos. 183 and 188) to class members requesting that they opt-out through a form distributed by Colegio.

Class Plaintiffs filed a motion for a protective order arguing that the communications being disseminated by Colegio were misleading. At that time, Judge Jaime Pieras Jr. had no choice but to enter a protective order as it had become quite clear the Colegio intended to continue with its deceptive tactics. After determining that the communications were both misleading and aimed at coercing class members into opting-out,³ the Court entered a narrowly-tailored protective order precluding Colegio from communicating directly or indirectly with class members, without prior leave of Court, regarding this litigation or the claims therein until the Class Action Notice was provided and the opt-out procedures were completed (No. 202).

As was its right, Colegio appealed the Court's Order granting the protective order (No. 214). The appeal is still pending. On January 26, 2011, the Class Action Notice was mailed in this case. In it, class members were provided with neutral and accurate information about the case, with simple procedures for opting-out, and with the rights that all class members had. To opt-out, class members had to mail and postmark a letter, on or before February 26, 2011, to the Brown v. Colegio de Abogados Administrator (the “Administrator”) stating “I do not want to be part of the Damages Class in Brown v. Colegio de Abogados de Puerto Rico, CV 06–1645(JP).” Said request had to be signed, and include the name, address, and telephone number of the class member. Also, the notice stated that the address listed should be the address to which the notice was mailed so that individual class members could be easily identified. Said Class Action Notice provided everything that the First Circuit made clear was required to comply with due process and the Federal Rules of Civil Procedure. Brown, 613 F.3d at 51 (explaining what needed to be included in the Class Action Notice).

In addition to mailing the Class Action Notice to class members, said notice was published on Colegio's and this Court's website, and information on opting-out was made available via a separate website and a toll-free phone number. All of this was done in English and Spanish.⁴

On February 1, 2011 (No. 303–1), the First Circuit denied Colegio's request to stay the proceedings pending the resolution of its appeal of the protective order. The First Circuit also made it clear that if Colegio prevailed on its appeal, the notice and opt-out procedures could be repeated without the protective order.⁵ Ignoring the First Circuit, Colegio and its President, Osvaldo Toledo Martínez, (“Toledo”) decided that they would bypass the appeals process and take matters into their own hands.⁶

Class Plaintiffs filed two separate motions for orders to show cause (Nos. 306 and 311) as they had acquired evidence that Colegio and, in particular, Toledo was violating the protective order and other orders of this Court. The first motion to show cause was filed on February 3, 2011. On February 4, 2011, the Court granted the motion for an order to show cause and ordered Colegio to show cause on or before February 8, 2011 (No. 307).

On February 7, 2011, Class Plaintiffs filed the second motion for an order to show cause. Because of the seriousness of the allegations and the high probability that Colegio would continue its unruly behavior, the Court, on February 8, 2011, set a show cause hearing for the same day and ordered Colegio and Toledo to be present at the hearing and show why they should not be found in contempt of Court for the conduct described in Class Plaintiffs' motions at docket numbers 306 and 311 (No. 315).

Even though Colegio's attorneys informed the Court that Toledo had been provided with notice of the hearing and that his presence was required, Toledo failed to appear and present evidence. Class Plaintiffs presented evidence that: (1) an email was being circulated among class members containing the same opt-out form that the Court had previously rejected and which Colegio had created; ⁷ (2) Toledo sent out two emails to class members in direct violation of the protective order; ⁸ (3) Toledo spoke on a radio show about this case in direct violation of the protective order; ⁹ and (4) that a website had been created that provided information which could only be in the possession of Colegio. Colegio and/or Toledo presented no evidence or substantive arguments. Based on the overwhelming evidence that Colegio and Toledo had willfully violated the Court's Orders, the Court was left with no choice but to enter a finding of civil contempt against Colegio and Toledo (No. 319).¹⁰

In the civil contempt order, the Court expressed very serious concerns that Colegio's behavior was undermining the rule of law in Puerto Rico (No. 319, p. 11 n. 7). Their decision to bypass legal procedure, to willfully violate Court orders, and, for all intents and purposes, to act as if they were above the law set a terrible precedent. As could only be expected, others began to follow Colegio's example. An attorney named Ada Conde–Vidal filed a motion with the Court in which she blatantly lied to the Court (No. 480, p. 15).¹¹ Perhaps the most shocking action was the commission of mail fraud. Said criminal conduct was committed by an unidentified individual who mailed falsified opt-outs in a falsified envelope to Rust Consulting, the company responsible for mailing the notices and counting the opt-outs (Nos. 474, 498 and 531). This unfortunate turn of events provides a clear example as to why any association which purports to represent the legal profession should be mindful of its...