Disciplinary proceedings instituted by the Departmental Disciplinary Committee for the First Judicial Department. Respondent, Edward D. Fagan, was admitted to the Bar of the State of New York at a Term of the Appellate Division of the Supreme Court for the Third Judicial Department on February 23, 1988.
Published by New York State Law Reporting Bureau pursuant to Judiciary Law § 431.
This opinion is uncorrected and subject to revision before publication in the Official Reports.
Angela M. Mazzarelli, Justice Presiding, Richard T. Andrias, John W. Sweeny, Jr., James M. McGuire, Dianne T. Renwick, Justices.
M-2732 (July 14, 2008) M-3148 (August 11, 2008)
Respondent Edward Fagan was admitted to the practice of law in the State of New York by the Third Judicial Department on February 23, 1988, under the name Edward Davis Fagan. At all times relevant to this proceeding, he has maintained an office for the practice of law within the First Judicial Department.
The Departmental Disciplinary Committee now seeks an order pursuant to 22 NYCRR 603.4(d) and 605.15(e)(1) confirming the report of the Hearing Panel and disbarring the respondent from the practice of law in the State of New York. Respondent has filed a cross motion to compel the Committee to produce the record of the disciplinary proceedings, and a separate motion seeking, inter alia, to disqualify the Hearing Panel.
This disciplinary proceeding arises out of respondent's representation of the plaintiffs in a lawsuit filed in the United States District Court for the Southern District of New York entitled Association of Holocaust Victims for Restitution of Artwork & Masterpieces, a/k/a "AHVRAM", et al v Bank Austria Creditanstalt AG, et al, No. 04 Civ. 3600. Respondent filed that $6.8 billion action in 2004 against various corporations, governmental entities and financial institutions alleging theft, retention, and sale of artwork looted during the Holocaust.
On August 19, 2005, Judge Shirley Wohl Kram dismissed the amended complaint in the case on the basis that it failed to assert any basis for federal court jurisdiction and that it constituted "little more than an end run" around a separate action which ended in a comprehensive settlement against defendant Bank Austria (Assoc. of Holocaust Victims for Restitution of Artwork & Masterpieces v Bank Austria Creditanstalt AG, 2005 US Dist LEXIS 17411, *6 [SDNY 2005]). Judge Kram also noted that the plaintiff organization AHVRAM did not exist.
Judge Kram granted Bank Austria's motion to sanction respondent, finding that the lawsuit, being "entirely without color", was frivolous and in bad faith in violation of Rule 11. Judge Kram commented on, among other things, respondent's lack of preparation and professionalism, his "glaringly inadequate filings," and the fact that he deceived the court of "critical facts" concerning the previous class action settlement against Bank Austria in which he had substantially participated (2005 US Dist LEXIS 17411, *12). Judge Kram stated that the pleadings contained flagrant misrepresentations, that respondent falsely claimed that he was a member of the plaintiff organization AHVRAM, and that respondent attempted to circumvent the Bank Austria settlement. Judge Kram further noted that respondent, through AHVRAM, was prosecuting actions against at least six governments or entities, and stated that the findings were "bolstered by the fact that this case appears to be part of a pervasive and disturbing trend." (2005 US Dist LEXIS 17411, *18). Finally, Judge Kram stated that respondent engaged in champerty in violation of Judiciary Law § 488 and DR 5-103, based on her conclusion that respondent purchased interests in stolen artwork solely for the purpose of bringing lawsuits involving that artwork (2005 US Dist LEXIS 17411, *17). Judge Kram fined respondent $5,000 to be paid immediately to the court, and ordered him to pay his adversary's litigation costs and fees.
Respondent moved for reconsideration of and a stay of the court's rulings, which the court denied on November 17, 2005. The court further determined that respondent owed Bank Austria a total of $345,520.64 in litigation costs and expenses, and ordered him to immediately pay the $5,000 fine or post a bond. On December 1, 2005, judgment was entered against respondent and in favor of the defendant in the amount of $345,520.64. On January 13, 2006, the U.S. Court of Appeals issued a mandate dismissing respondent's appeal of Judge Kram's August 19, 2005 sanction order and deemed any pending motions moot.
In her November 17, 2005 decision denying reconsideration, Judge Kram commented further on respondent's "flagrant, repetitive, and blatant" conduct and "careless abdication of his duties as a lawyer" (2005 US Dist LEXIS 28880, *27). The court believed the only way to deter respondent from "bringing baseless suits in the ...