According to the Minnesota Appellate Court’s “Case Management System” data for case A15-1855, on Friday, 07/1/2016 at 14:28 CDT the MN Office of Lawyer Professional Responsibility (OLPR) asked the Clerk of that Court to file two documents: Hansmeier’s “Stipulation for discipline“, and a proposed order for the Court. In the stipulation, Hansmeier “unconditionally admits” (almost) all of the allegations in the original and supplemental petitions. In exchange, the MN OLPR agrees to recommend that Hansmeier be
[…] indefinitely suspended from the practice of law, effective 14 days from the order of the MN Supreme Court, with no right to petition for reinstatement for four years.
Like in the vast majority of “plea bargains” in criminal cases, the MN Supreme Court is not bound to accept the recommendations of the OLPR. In fact, there appears to be some conclusion as the “proposed order” mentioned in the previous paragraph is exactly that: a proposed order. As of 07/02/2016, the court has not made any ruling in this case, and Hansmeier’s “law license” has not yet been suspended. (One of the “dirty little secrets” of the US courts is that the lawyers for one or both of the parties write almost every order issued by a court. The “proposed order” is what the OLPR has agreed to recommend to the MN Supreme Court.)
At this point it is important to point out that the words “suspension” and “disbarment” as used in attorney discipline do not have their usual meanings. In professional sports, if an athlete is suspended, a time frame is given and when that time period is over, he is automatically reinstated. The public also generally believes that if a lawyer is “disbarred” (or more technically, his admission to the bar of a court is “annulled”), that such an action is permanent. In reality, in almost every jurisdiction, if an attorney is “disbarred” he has the right to petition for reinstatement at some point in the future. (While such petitions are sometimes granted, they are very rare.) In MN, if an attorney is suspended for 90 days or more, then he must still petition the MN Supreme Court for reinstatement, and such reinstatements are far from automatic.
Many readers of this site may think that Hansmeier has slithered his way through his lawyer discipline process since he was “only suspended” rather than “disbarred.” However, in terms of practical consequences, there is little difference between the two. If he was disbarred, he could still petition for reinstatement at some point in the future, and there are not dramatically better odds of being reinstated after being disbarred as opposed to a significant suspension.
That leaves us with a couple of additional questions: If Hansmeier did not get a whole lot out of the agreement, why did he go along with this? What about the timing of the announcement? Finally, what about his ADA cases?
When the MN OLPR decided to file a “Petition for Disciplinary Action”, Hansmeier went and hired the best attorney for fighting these types of cases: Eric Cooperstein. Cooperstein is apparently very good at what he does; practices in a very narrow, technical area without much competition; and has desperate clients. That means he is not cheap. It is also important to note that Hansmeier (and Browne) both recently settled several “adversary proceedings” in his bankruptcy case. Again, this has not been his previous litigation strategy. So why has Hansmeier done a “180” in his personal litigation strategy over the last month or so? I do not think it is a coincidence that this apparently new strategy began at roughly the same time that rumors of an active, substantial, criminal investigation began to surface.
My guess — and it is only a guess — is that he might be running out of available cash. If the rumors of the criminal case are correct, he is going to need a significant amount of ready cash to fund what would be an expensive defense. Again, assuming the rumors are correct, to defend against the charges he could be facing you would need more than a “country lawyer” and a couple of “eye-witnesses.” Even if he were to have a substantial amount of money stocked off-shore, with a slew of federal agencies and a hyper-aggressive bankruptcy trustee keeping watch on him, it would likely be impossible for him to actually access and use that money. That is why I used the term “available” cash earlier in this paragraph. If — if — he has become aware that he is facing federal criminal prosecution, then he may have decided that his remaining assets would be better spent trying to fend off prison time.
A second angle that could tie his decision in the MN lawyer discipline case with a potential criminal prosecution is that he had provided only the minimum possible amount of detail in his answers to the OLPR petition (allegations.) One well known prosecution strategy in a criminal case is to lock the defendant into one version of events, and then once they can’t change anything, attack their story. If the referee would have ruled against Hansmeier and if he chose to continue the fight before the MN Supreme Court, he would have been forced to provide evidence, explanations, time lines, etc., etc. This would have had the additional effect of locking a future criminal defense attorney into one story, and probably not a very good story. (Note the same rationale applies to much of his bankruptcy case.)
The timing of the announcement of this settlement (“stipulation”) is worthy of the best political “spin-doctors.” If you want to bury a news-story, then announce it late on the Friday before a three-day weekend. If the goal was to slip this story “under the proverbial radar,” then it certainly succeeded. According to a web search on the evening of 07/02/2016, there is only one (1) news article that mentions these developments. Not surprisingly, it was written by Dan Browning. However, the story itself is a generic piece on MN lawyer discipline with only a few sentences added about Hansmeier. Determining why such spin-doctoring was desired a little more difficult. As mentioned, while the MN Supreme Court could impose a superficially tougher sanction such as disbarment, it could also theoretically let him off with just a reprimand. It is also true that if you are facing a criminal trial over the very things that led to this discipline, it is better for the jury to learn you were “suspended” as opposed to “disbarred.” Perhaps he and his attorney felt it is best not to let the anger he has generated from his MN ADA cases materialize before the MN Supreme Court.
Now on to the MN ADA Cases: If you think “Prenda” has been crazy so far, I have a hunch the resolution of the ADA cases will be a couple orders of magnitude more entertaining. I outlined a couple of the possible outcomes in the “What is next for Paul Hansmeier?” post. However, I don’t know enough about MN civil litigation to really predict what impact the recent “reform” legislation (HF 2955/SF 2584) will have, or how these ADA cases will end up.
As a summary, if you think Hansmeier is going soft, it is worth pointing out Dan Browning’s tweet that on the day before he filed this stipulation, he also filed 8 more “serial ADA” cases.
— Dan Browning (@BrowningStrib) July 2, 2016
(Once again, it is important to point out that the MN Supreme Court has not yet made a decision on the discipline in his case, and his license is not yet suspended.)
- Boing Boing: One of the copyright’s scummiest trolls loses his law license
- TechDirt: Prenda’s Paul Hansmeier Loses His Law License; Won’t Be Filing Bogus ADA Lawsuits For Now
- TwinCities.com: Minneapolis lawyer suspended over porn copyright lawsuits
- Ars Technica: Prenda lawyer Paul Hansmeier has his law license suspended
Yesterday the Minnesota Supreme Court followed up the stipulation, indefinitely suspended Paul Hansmeier from the practice of law, effective 9/26/2016, with no right to petition for reinstatement for 4 years:
¹ The one allegation he did not admit was 135-L in the Supplemental Petition which stated that he paid himself $23,000 from the checking account of “Class Action Justice Institute LLC” between 12/3/2012 and 7/18/2013. The MN OLPR agreed to drop the allegation.