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In re Complaint as to Conduct of Nisley

Supreme Court of Oregon, En Banc

December 12, 2019

In re Complaint as to the Conduct of ERIC J. NISLEY, OSB No. 951049, Respondent.

          Argued and Submitted May 6, 2019.

          On review of the decision of a trial panel of the Disciplinary Board (OSB 16-167). [*]

          Lawrence Matasar, Lawrence Matasar, PC, Portland, argued the cause and fled the briefs for respondent.

          Susan R. Cournoyer, Assistant Disciplinary Counsel, Tigard, argued the cause and fled the brief for the Oregon State Bar.

         Case Summary:

         The Oregon State Bar alleged that respondent, a District Attorney, knowingly made six false and material statements to the Bar during an investigation into possible misconduct that had involved the investigation of certain payments made by another county official using county funds. A trial panel of the Disciplinary Board determined that respondent had made one such false statement, in violation of BR 8.1(a)(1), and suspended him for 30 days.

         Held:

         (1) The Bar proved by clear and convincing evidence that respondent had knowingly made four false, material statements, amounting to a single violation of BR 8.1(a)(1); and (2) The appropriate sanction is a 60-day suspension.

         Respondent is suspended from the practice of law for 60 days, commencing 60 days from the date of fling of this decision.

         [365 Or. 794] PER CURIAM.

         In this lawyer disciplinary proceeding, the Oregon State Bar alleged that respondent knowingly made six false and material statements to the Bar during an investigation into possible misconduct, in violation of Rule of Professional Conduct (RPC) 8.1(a)(1). A trial panel determined that respondent had made one such false statement, and it imposed a one-month suspension. Respondent requested review and seeks dismissal; the Bar counters that it proved all its allegations and requests a six-month suspension. On de novo review, we conclude that respondent made four false statements, and we suspend him from the practice of law for 60 days.

         I. FACTS AND PROCEDURAL BACKGROUND

         Respondent is the District Attorney (DA) for Wasco County, having served since 1999. In 2014, he initiated an investigation involving potentially unlawful conduct by one or more county officials, including the county's then-finance manager, Morris. Respondent later was accused by the county's counsel of violating a conflict of interest rule in connection with that investigation. In responding to an ensuing Bar inquiry, respondent made six statements that the Bar later alleged had been false. Although the Bar's false statement allegations-not the earlier-reported conflict of interest accusation-are at issue here, a description of the underlying events that led to the statements is necessary to put them in context. We take the facts set out below from the record.

         A. Underlying Events

         The first underlying event occurred in 2011 and had involved inappropriate conduct by respondent toward Morris. At that time, respondent was serving as both Wasco County Counsel and DA. While he and Morris were attending a conference, they had gathered with others in the evening in a hotel lounge. Respondent-who was very intoxicated- directly propositioned Morris, and she refused. Respondent passed out shortly thereafter. He was embarrassed about the incident and apologized to Morris not long afterwards, and she accepted his apology. Morris told her supervisor, Stone, [365 Or. 795] who was the county's Administrative Officer, about the incident, but she declined the opportunity to pursue any action. The record otherwise does not reflect any further activity in connection with that incident, although Morris stated in an affidavit that, since then, respondent had engaged in other nonsexual, "but intimidating," behavior toward her, without elaboration. Respondent and Morris both continued to work for the county, in the same building.

         The second underlying event involved an investigation that respondent initiated three years later, in his capacity as DA, again involving Morris.[1] In 2014, a local official asked respondent to check into a disbursement of county funds that Morris had made-specifically, two cash payments totaling $360 made to an intern, Davila, which Morris had treated as permissible advance salary draws. Unbeknownst to the inquiring official, or to respondent until much later, the payments apparently had been expressly authorized at the time by Stone. And, as will be seen, a key aspect of the parties' dispute involves the extent to which respondent focused on Morris during the investigation.

         When initially told about the cash payments, respondent commented to the inquiring official that Morris would not have made them without Stone's authorization. He nonetheless thought that the payments were problematic, and, because the conduct involved another county official, he asked the Oregon State Police (OSP) to investigate. In doing so, he stated that an apparent unlawful loan of county funds-possibly amounting to official misconduct- had been made by Morris to Davila, with no mention of Stone. Shortly thereafter, in an effort to preserve evidence, respondent secured a subpoena duces tecum that granted him access to a large number of emails between Stone and others, including Morris and Davila.

         OSP referred respondent to the Oregon Department of Justice (DOJ), and respondent then submitted a similar investigation request to DOJ. DOJ's memorializing intake form and case note stated that respondent had requested [365 Or. 796] "the investigation *** of *** Morris";[2] mentioned no other county official; and noted a possible statutory violation. DOJ opened a case in December and assigned an investigator, Culley, and an Assistant Attorney General, Benson. Based generally on the nature of respondent's initial request, DOJ's intake form identified Morris as the "subject."

         Culley began contacting witnesses, and Stone sent him documentation, spoke with him by phone, and was interviewed by him and Benson. Stone's documentation showed that Morris recently had explained the cash payments to him as permissible salary draws under the county employees' union bargaining agreement. Stone also told Culley that cash advances were a local practice and that he was not concerned about the allegations. And, Stone told Culley and Benson about the 2011 incident between respondent and Morris, and he commented that respondent's current actions were "axe grinding" against her. Culley and Benson also interviewed Morris, who similarly relied on the bargaining agreement to support the payments. By the end of their witness interviews, Culley and Benson tentatively concluded that the bargaining agreement had permitted the payments and that no improper conduct had occurred. DOJ did not generate a report for a few months, however.

         In the meantime, respondent had become increasingly frustrated at the progress and quality of the DOJ investigation, and, beginning in January 2015, he began contacting DOJ with some frequency. In many of those communications, he asked about the status of the "Morris" case- which, as noted, is what DOJ had named its case file based on his initial inquiry. In one email, he wrote that Morris was "in charge of all the County's finances and appears to have committed a crime"; in others, he wrote that this was a "very serious matter[, involving] not simply an employee draw [but] an illegal loan of taxpayer's funds," and that he was "very concerned" about Morris's conduct and the fact that she continued to work as finance manager with limited oversight. In one of those emails, he also wrote that Morris [365 Or. 797] appeared to be concealing information from elected officials; in another, he forwarded information about an earlier cash payment that she apparently had made to a different employee; in yet another, he noted a finding of "discrepancies in the county's cash fund." He also suggested additional persons to interview and stated that, if DOJ declined to investigate, he would do so. After one phone call with respondent, Benson noted that he "wants us to prosecute" Morris. From DOJ's perspective, respondent was exclusively focused on Morris as a wrongdoer.

         In February, Benson told respondent that DOJ had determined that it did not appear that DOJ would be able to press criminal charges, citing the bargaining agreement and DOJ's interview information. Respondent disagreed, and he also thought the agreement had not covered an intern, such as Davila. He therefore wrote to Benson's supervisor, Tuttle, in early March, stating that he would complete the investigation locally and requesting that DOJ send its documentation to him.

         Later in March, Culley issued a report that concluded that nothing supported the allegation that Morris had committed a crime by disbursing funds under the bargaining agreement.[3] That report identified Morris as a "subject" and Stone as a "witness." Also, Benson wrote a declination of prosecution letter to respondent, explaining that the cash payments had been "legal" under the bargaining agreement and generally mentioning Stone's apparent approval. At this juncture-given the nature of all respondent's communications with DOJ-Culley, Benson, and Tuttle all understood respondent's sole focus in the investigation to have been on Morris, not on Stone or anyone else, and they also thought that respondent wanted them to prosecute Morris.

         DOJ then turned its materials over to respondent. When respondent reviewed Culley's report, he concluded that Culley had been biased toward Morris, and he sent Benson an email to that effect. He also decided to interview Davila, which DOJ had not done. That ensuing interview uncovered [365 Or. 798] information that was both new and significant to respondent: Davila told him that Stone expressly had approved the cash payments contemporaneously with Morris making them. Respondent thought that that information actually exonerated Morris because she had acted with Stone's permission; he also thought that it implicated Stone.

         Meanwhile, Morris had found it difficult to work in the same building as respondent. She discussed her discomfort with lawyers representing the county, who in turn learned about the earlier 2011 incident between Morris and respondent. Concerned that Morris might take action against the county, the Wasco County Counsel, Timmons, asked DOJ for its investigatory materials. Tuttle asked respondent for permission to release them, but he initially declined, citing his ongoing investigation. That communication appears to have occurred before he interviewed Davila.

         In May, Timmons sent a second materials request to DOJ, and Tuttle again asked respondent whether Morris was still under investigation. Respondent answered that he had not yet completed his work, but also that "Morris is actually not the suspect in this matter." He elaborated that, following his interview with Davila, Morris had been absolved of wrongdoing. Tuttle responded that she was surprised to hear him deny that Morris was the "suspect" because, in his communications with DOJ, he had focused solely on Morris.

         Respondent decided to seek outside review as to whether he should pursue criminal charges arising from the cash payments. In June, he prepared summary materials- which focused on Stone's role in authorizing the payments and his own assessment that the bargaining agreement had not applied-and sent them to another DA for review. That DA agreed with respondent that the payments had not been proper and that the bargaining agreement had not covered Davila. He further recommended, however, against prosecuting Morris or Stone. Respondent thereafter closed his file.

         B. Bar's Investigation and Alleged False Statements

         Meanwhile, in May 2015, Timmons had complained to the Bar's Client Assistance Office (CAO). Among other, unrelated allegations, he asserted that respondent had [365 Or. 799] initiated a "retaliatory" investigation against Morris, which had involved a "personal interest" conflict of interest under RPC 1.7(aX2), in light of the 2011 incident.[4] The CAO assessed that Timmons's allegations might have implicated RPC 1.7(a)(2) and also RPC 3.1 (prohibiting frivolous proceedings or actions), and it asked respondent to respond, focusing on those rules and his "alleged retaliatory investigation."

         Over the next 10 months, the CAO and, later, the Bar's Disciplinary Counsel Office (DCO), engaged in further written communications with respondent. Respondent wrote four letters to the Bar, two through counsel (both to the CAO), and two while representing himself (both to the DCO). The Bar alleges that, in his first three letters written over a four-month period, respondent knowingly made six false statements that were material to the Bar's investigation. We provide greater detail about those six statements later in this opinion; they can be summarized as follows: (1) Morris had not been the "target" of any investigation, and respondent never had seen her as the "target" (three statements); (2) Morris never had been the "subject" of the investigation (one statement); and (3) respondent had requested a "general investigation" about the cash payments, and his concern had been completing that investigation to determine who had authorized them (two statements).

         C. Complaint and Trial Panel Proceeding

         The Bar filed a formal complaint that briefly described the 2011 incident; respondent's investigation of the cash payments, including the nature of his representations to others (particularly DOJ staff) about Morris; and the nature of Timmons's complaint accusing respondent of initiating and pursuing a retaliatory investigation against Morris that had posed a conflict of interest. The Bar alleged that, in response to its inquiries, respondent had denied that he had had any personal-interest conflict related to the investigation "because, he claimed, he had not targeted [365 Or. 800] Morris in his investigation" and, in support of that theory, had made the six alleged false statements. The Bar further alleged that each statement had been both false and material to its inquiry, and had been knowingly made, in violation of RPC 8.1(a)(1).[5]

         The matter proceeded to a hearing before a trial panel of the Disciplinary Board. Respondent was represented by counsel;[6] neither Morris nor Stone testified.

         In assessing the evidence, the trial panel evaluated respondent's alleged false statements in the three categories identified above: his denials that Morris had been a "target"; his denial that she had been a "subject"; and his assertions about the nature of his investigation. The panel also framed the inquiry in the context of Timmons's initial complaint to the Bar-that is, Timmons had accused respondent of initiating a "retaliatory" investigation against Morris, and respondent thus had responded within that framing, denying that he had acted with any retaliatory motive.

         The trial panel addressed the retaliation issue first and found that respondent had not retaliated against Morris; instead, his investigation had been legitimate and nonretal-iatory. Turning to the three "target" statements, the panel determined that those statements should be understood to mean that respondent had not "targeted" Morris-that is, he had not viewed her as a "target in retaliation" when he initiated and pursued the investigation. It followed, in the panel's view, that the Bar did not prove that those three statements had been false when made.

         The trial panel also determined that the Bar had not proved that respondent's statements about the nature of the investigation had been false. In support, the panel cited respondent's legitimate interest, as the county's DA, in investigating a seemingly improper loan involving county funds and evidence in ...


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