Rich Reister vs. Wretched Reynolds – Disparate treatment of lawyers reaching out to people in need of legal services too quickly under Texas anti-Barratry Statute is ... rather troubling

CHASING CLIENTS FOR A LIVING: THE CRIMINAL DIMENSION OF CONSUMER LAW 

Reister versus Reynolds is not an actual case. It’s two cases. Reister is shorthand for Janet L. Shearer v Rich Reister, and – after a trip to the court of appeals - Reister v Dallas County District Attorney, while Reynolds stands for State of Texas vs. Ronald Eugene Reynolds, and Reynolds v State of Texas, on appeal in iterations, for a total of five convictions, now affirmed.

Richard Reister solicited clients in violation of the Texas barratry statute and got the law declared unconstitutional so he could keep doing it; Ronald Reynolds is heading for jail for one year unless the Texas Court of Criminal Appeals reverses.

This blawg normally focuses on debt collection litigation, but I will digress and address an issue that falls under the rubric of “the law that governs lawyers” and is, as will become clear, related.

REYNOLDS CONVICTIONS ON MISDEMEANOR BARRATRY CHARGES AFFIRMED

Shortly after Thanksgiving, an appellate court in El Paso, Texas affirmed the conviction of a Texas personal injury attorney on multiple barratry charges. Ronald Eugene Reynolds v The State of Texas, Nos. 08-15-00372-CR; 08-15-00373-CR; 08-15-00374-CR; 08-15-00375-CR; 08-15-00376-CR (Nov. 29, 2017). The trial took place in Montgomery County north of Houston and the appeal was transferred from the Beaumont Court of Appeals, which would normally hear appeals from that county.

Roster of quintuplet of Reynold's criminal barratry cases on appeal 

The fact that the criminal defendant is also a Democratic member of the Texas House of Representatives adds a special wrinkle, and has no doubt caused this barratry case to receive more media attention than it would otherwise have attracted at the time it was prosecuted and tried, but this is not the key issue.

At least not from a legal and public policy perspective.

The key issue, as I see it, is that the charge and conviction was not for “ambulance chasing” per se (though the background facts in the case are not complimentary and also illustrate other misconduct); instead, the penal code violation that resulted in Reynold’s conviction was the violation of the statutory blackout period for soliciting would-be clients; -- in Reynold’s case, accident victims.

In Texas, contacting victims of accidents within 31 days of the accident to solicit them as clients is a crime (misdemeanor) while doing so after 31 days is not (as long as it does not involve methods of solicitation that are otherwise prohibited).

Texas Penal Code anti-barratry provisions.
See -- > Current version of Chapter 38.12 .
BARRATRY AND SOLICITATION OF PROFESSIONAL EMPLOYMENT 

While this is a matter of state law, and could be changed if the Texas Legislature were to reconsider the wisdom of it, the critical point in time when illegal becomes legal is – essentially – arbitrary.

This arbitrary black-out period also applied to solicitation of people finding themselves as defendants in civil court, the reference point there being the date the lawsuit was filed against them, rather than the date of the accident that gave rise to the personal injury claim against the at-fault driver. Tex. Penal Code Section 38.12(d)(2)(C) [current version, renumbered].

(C) concerns a lawsuit of any kind, including an action for divorce, in which the person to whom the communication or solicitation is provided is a defendant or a relative of that person, unless the lawsuit in which the person is named as a defendant has been on file for more than 31 days before the date on which the communication or solicitation was provided;

Reynolds is heading to county jail for one year for multiple violations of the 31-day blackout period, but another lawyer, up in Dallas, was not only not indicted (not to mention convicted), but sued the District Attorney (by third-party petition in a civil barratry case, see motion below) and got the DA enjoined from enforcing the barratry statute against him as unconstitutional.

Both lawyers were looking for business. Both did it for economic gain. See State v. Sandoval, 842 S.W.2d 782, 788 (Tex. App.-Corpus Christi 1992, pet. ref'd) ("The culpability required under the [barratry] statute is the intent `to obtain an economic benefit.'").

To seek an economic benefit is not an inherent evil. Indeed, it is a fundamental premise of a free market system. Nor is the pursuit of self-interest necessarily at the expense of another. Mutual bargains and exchanges are also a fundamental tenet of our economic and social system.

Here, in the Reister vs. Reynolds juxtaposition, both lawyers were not only looking to line their own pockets. Both have a legitimate claim that they were reaching out to people in need of legal assistance, and that they were offering a useful service to people in need of such service.

In the case of accident victims, there was a high probability that the solicited clients would obtain an economic benefit, with no out-of-pocket expense to them (based on a contingent fee contract).

In the case of Reister, who solicited clients to defend them against debt collection suits, the client would have to pay Reister, with the prospect of having their debt suits dismissed thanks to the benefits of legal representation being iffy, at best. Reister certainly could not guarantee a favorable outcome in the nature of judgment-avoidance (dismissal of debt suit or take-nothing judgment), and the solicited clients would be responsible for the payment of whatever fee Reister charged them for the defense work. In other words, Reister’s clients were not necessarily net beneficiaries of his services.

In the case of auto-PI cases, by contrasts, there would be no point for the lawyer to solicit the client and pursue the claim if both the client and the lawyer would not jointly benefit from the recovery of damages. The point here is that in a traditional contingency-fee contract on a cause of action for monetary relief such as a PI case or claim for other types of damages, the economic interests of attorney and client are more closely aligned than they are in the judgment-avoidance or judgment-settlement context (although the latter may also contain a contingent feature requiring the client to pay additional fees, based on the savings achieved for the client relative to the amount they were sued for).

Yet Reister, a confessed "habitual violator" (see his affidavit below) was accommodated with a judicial declaration that would allow him to continue to solicit debtors and make money off them (regardless of case outcome) while Reynolds is heading to jail for procuring monetary recoveries for people he permitted to be solicited (to become his clients) within the 31-day blackout period, and for whom he obtained recoveries.

Who is the victim here, if there is one? Who was wronged? 

I would submit that the question should at least be seriously pondered.

As should the wisdom of the law under which Reynolds was convicted.

RICH REISTER - WRETCHED  REYNOLDS 

Reister's Plea against enforcement of the Texas barratry statute: 

Attorney affidavit complaining of Texas barratry

statute impeding the business of soliciting debt defense cases

CHARGING INSTRUMENT 

 CURRENT VERSION OF TEXAS ANTI-BARRATRY STATUTE 

Sec. 38.12.  BARRATRY AND SOLICITATION OF PROFESSIONAL EMPLOYMENT.  (a)  A person commits an offense if, with intent to obtain an economic benefit the person:

(1)  knowingly institutes a suit or claim that the person has not been authorized to pursue;

(2)  solicits employment, either in person or by telephone, for himself or for another;

(3)  pays, gives, or advances or offers to pay, give, or advance to a prospective client money or anything of value to obtain employment as a professional from the prospective client;

(4)  pays or gives or offers to pay or give a person money or anything of value to solicit employment;

(5)  pays or gives or offers to pay or give a family member of a prospective client money or anything of value to solicit employment;  or

(6)  accepts or agrees to accept money or anything of value to solicit employment.

(b)  A person commits an offense if the person:

(1)  knowingly finances the commission of an offense under Subsection (a);

(2)  invests funds the person knows or believes are intended to further the commission of an offense under Subsection (a);  or

(3)  is a professional who knowingly accepts employment within the scope of the person's license, registration, or certification that results from the solicitation of employment in violation of Subsection (a).

(c)  It is an exception to prosecution under Subsection (a) or (b) that the person's conduct is authorized by the Texas Disciplinary Rules of Professional Conduct or any rule of court.

(d)  A person commits an offense if the person:

(1)  is an attorney, chiropractor, physician, surgeon, or private investigator licensed to practice in this state or any person licensed, certified, or registered by a health care regulatory agency of this state; and

(2)  with the intent to obtain professional employment for the person or for another, provides or knowingly permits to be provided to an individual who has not sought the person's employment, legal representation, advice, or care a written communication or a solicitation, including a solicitation in person or by telephone, that:

(A)  concerns an action for personal injury or wrongful death or otherwise relates to an accident or disaster involving the person to whom the communication or solicitation is provided or a relative of that person and that was provided before the 31st day after the date on which the accident or disaster occurred;

(B)  concerns a specific matter and relates to legal representation and the person knows or reasonably should know that the person to whom the communication or solicitation is directed is represented by a lawyer in the matter;

(C)   concerns a lawsuit of any kind, including an action for divorce, in which the person to whom the communication or solicitation is provided is a defendant or a relative of that person, unless the lawsuit in which the person is named as a defendant has been on file for more than 31 days before the date on which the communication or solicitation was provided;

(D)  is provided or permitted to be provided by a person who knows or reasonably should know that the injured person or relative of the injured person has indicated a desire not to be contacted by or receive communications or solicitations concerning employment;

(E)  involves coercion, duress, fraud, overreaching, harassment, intimidation, or undue influence; or

(F)  contains a false, fraudulent, misleading, deceptive, or unfair statement or claim.

(e)  For purposes of Subsection (d)(2)(D), a desire not to be contacted is presumed if an accident report reflects that such an indication has been made by an injured person or that person's relative.

(f)  An offense under Subsection (a) or (b) is a felony of the third degree.

(g)  Except as provided by Subsection (h), an offense under Subsection (d) is a Class A misdemeanor.

(h)  An offense under Subsection (d) is a felony of the third degree if it is shown on the trial of the offense that the defendant has previously been convicted under Subsection (d).

(i)  Final conviction of felony barratry is a serious crime for all purposes and acts, specifically including the State Bar Rules and the Texas Rules of Disciplinary Procedure.

Acts 1973, 63rd Leg., p. 883, ch. 399, Sec. 1, eff. Jan. 1, 1974.  Amended by Acts 1989, 71st Leg., ch. 866, Sec. 2, eff. Sept. 1, 1989;  Acts 1993, 73rd Leg., ch. 723, Sec. 2, eff. Sept. 1, 1993;  Acts 1993, 73rd Leg., ch. 900, Sec. 1.01, eff. Sept. 1, 1994;  Acts 1997, 75th Leg., ch. 750, Sec. 2, eff. Sept. 1, 1997.

Amended by: 

Acts 2009, 81st Leg., R.S., Ch. 1252 (H.B. 148), Sec. 1, eff. September 1, 2009.

Acts 2013, 83rd Leg., R.S., Ch. 315 (H.B. 1711), Sec. 3, eff. September 1, 2013.