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Eugster v. Washington State Bar Association

Court of Appeals of Washington, Division 3

May 2, 2017

STEPHEN KERR EUGSTER, Appellant,
v.
WASHINGTON STATE BAR ASSOCIATION, a legislatively created Washington association (WSBA); and PAULA LITTLEWOOD, Executive Director, WSBA, in her official capacity; and DOUGLAS J. ENDE, Director of the WSBA Office of Disciplinary Counsel, in his official capacity; FRANCESCA D'ANGELO, Disciplinary Counsel, WSBA Office of Disciplinary Counsel, in her official capacity, Respondents. Fearing, C.J.

          FEARING, C.J.

         Endless litigation leads to chaos. Schroeder v. 171.74 Acres of Land, More or Less, 318 F.2d 311, 314 (8th Cir. 1963) (emphasis added).

         Stephen Eugster initiated this suit, the sixth proceeding involving the Washington State Bar Association (WSBA) and himself. Eugster sues the WSBA, the entity that administers Washington State's lawyer disciplinary system on behalf of the state Supreme Court, and some of WSBA's officials. Eugster claims that the discipline system violates his due process and First Amendment rights to the United States Constitution and that the WSBA retaliated against him for an earlier lawsuit. WSBA and its officials moved to dismiss the suit on five grounds: lack of subject matter jurisdiction, res judicata, failure to state a claim, immunity, and lack of justiciability. The trial court granted the motion on all grounds. On appeal, we hold that the trial court possessed subject matter jurisdiction, but that res judicata bars this lawsuit because Eugster could have asserted his due process arguments in at least one earlier proceeding.

         FACTS

         Since the trial court dismissed the complaint pursuant to a motion to dismiss, we borrow from Stephen Eugster's complaint to prepare this statement of facts. The WSBA, like most other state bar associations, functions as an integrated bar. All active lawyers in the state of Washington are members of and must pay dues to the WSBA. The WSBA, by direction of the Washington Supreme Court, administers the system to discipline lawyers who violate the attorney professional code of ethics. The Supreme Court reserves the final say in disciplining a member of the Washington State bar.

         In 2005, the WSBA investigated a lawyer disciplinary grievance filed against Stephen Eugster by a former elderly client, Marion Stead. After Stead terminated Eugster's services, Eugster filed a guardianship petition against Stead without any investigation as to her alleged incompetency. Eugster sought to appoint Stead's son as the guardian despite Stead having directed Eugster to remove her son from control over her affairs. In the process, Eugster disclosed to the son and others confidential communications between Eugster and Stead. Eugster refused to surrender papers and property to Stead and refused to deliver Stead's file to her new counsel. The WSBA Disciplinary Board recommended disbarment. The Washington Supreme Court, in a 5-4 decision, reversed the disbarment and instead suspended Eugster from the practice of law for eighteen months. In re Disciplinary Proceeding Against Eugster, 166 Wn.2d 293, 209 P.3d 435 (2009). During the proceeding, Stephen Eugster never challenged the constitutionality of the WSBA attorney disciplinary system. Because of the many proceedings involving Stephen Eugster and the WSBA, we refer to the grievance filed by Marion Stead and the eventual Supreme Court decision as Eugster I.

         During his eighteen-month suspension, the WSBA commenced Eugster II, an investigation of a grievance against Stephen Eugster filed by Mattie Kivett. In response to the second grievance, the WSBA eventually sent a letter to Eugster instructing him to analyze cases more thoroughly and concurrently dismissed the grievance. The WSBA gave notice to Eugster that he must avoid the grieved conduct and the WSBA would retain file documents concerning the complaint for five years.

         On January 21, 2010, Stephen Eugster filed Eugster III, in the United States District Court for the Eastern District of Washington, a complaint under 42 U.S.C. § 1983 alleging that Washington's attorney discipline system violated his due process rights under the Fifth and Fourteenth Amendments to the United States Constitution. Eugster v. Washington State Bar Association, No. CV 09-357-SMM, 2010 WL 2926237 (E.D. Wash. July 23, 2010), affd, A1A Fed.App'x 624 (9th Cir. 2012). He named, as defendants, members of the Washington State Supreme Court, the WSBA, and members of the WSBA Board of Governors. Eugster requested that the court enjoin the defendants from continuing to operate Washington's attorney discipline system. He initially further requested that the court declare void the suspension imposed on him in Eugster I, but he withdrew the request before the defendants filed a motion to dismiss. The United States District Court dismissed Eugster III, without prejudice, for lack of standing because Eugster failed to demonstrate that he suffered an actual or imminent injury in fact since he provided no evidence of any pending disciplinary proceeding against him.

         Stephen Eugster appealed Eugster III to the United States Ninth Circuit Court of Appeals. In an opinion shorter than our opinion, the federal appeals court affirmed the dismissal since Eugster did not allege he would ever again be subject to disciplinary proceedings. Eugster v. Washington State Bar Association, A1A Fed.App'x 624 (9th Cir. 2012).

         On September 23, 2014, Cheryl Rampley filed Eugster IV, a lawyer disciplinary grievance with the WSBA against Stephen Eugster, the third grievance against Eugster. Rampley is the niece-in-law of Verdelle G. O'Neill, a client of Eugster. The WSBA sent notice of the grievance to Eugster on October 1, 2014. In response, Eugster sent voluminous records to the WSBA concerning his representation of O'Neill. He also wrote letters to respond to Rampley's allegations. On November 21, 2014, Kevin Bank, WSBA managing disciplinary counsel, relayed a letter to Eugster to inform him that the WSBA assigned Bank to complete the investigation. Eugster responded to further letters from Bank. A Christmas day 2014 letter from Eugster asked Bank to identify for Eugster his deficiencies so that Eugster could correct the wrongs.

         On March 12, 2015, Stephen Eugster filed Eugster V, Eugster v. Washington State Bar Association, No. C15-0375-JLR, 2015 WL 5175722 (W.D. Wash. Sept. 3, 2015), aff'd, ___ F.App'x ___ (9th Cir. 2017), in the United States District Court for the Western District of Washington. He joined as defendants in the suit WSBA officials and all justices of the Washington Supreme Court. In the federal suit, Eugster challenged the constitutionality, under the First and Fourteenth Amendments to the United States Constitution, of compulsory membership in and payment of dues to Washington's integrated bar association. Eugster asked for judicial declarations permitting him to practice law without membership in the WSBA, freeing him from mandatory bar dues, and declaring the WSBA unconstitutional.

         In our case on appeal, Stephen Eugster alleges that, despite being notified of the grievance filed by Cheryl Rampley in October 2014, the WSBA did not decide to commence an investigation based on the grievance until after his filing of Eugster V, his second federal lawsuit. According to Eugster, WSBA disciplinary counsel Vanessa Norman informed him of the investigation shortly after he filed the federal lawsuit. On April 3, 2015, Norman informed Eugster that the WSBA assigned her to conduct the investigation on Rampley's grievance. Then on April 21, 2015, defendant Francesca D'Angelo wrote to Eugster to inform him that the WSBA assigned her to investigate the grievance. Thereafter, Eugster responded to more requests for information from the WSBA. Verdelle G. O'Neill died on August 18, 2015.

         On September 3, 2015, the United States District Court for the Western District of Washington entered an order dismissing Eugster V. The court ruled that Stephen Eugster failed to state a claim under which he could receive relief because federal courts uphold the constitutionality of compulsory membership in and dues to bar associations. He also failed to state a claim on which he could receive relief with regard to the expenditure of funds by the WSBA, since the bar association allowed a Keller deduction. The district court dismissed the latter claim without prejudice to allow Eugster to amend the complaint to specifically allege misallocation of charges not permitted to be compulsory assessed. The court gave ten days for the amendment or else the court would also dismiss the claim with prejudice. The entire complaint against the WSBA was dismissed on the ground of Eleventh Amendment immunity, since a bar association is an arm of the state. Eugster v. Washington State Bar Association, No. C15-0375-JLR, 2015 WL 5175722 (W.D. Wash. Sept. 3, 2015). We suspect that Eugster did not amend the complaint. He filed an appeal with the Ninth Circuit Court of Appeals on September 21, 2015. The Ninth Circuit has yet to issue a decision in Eugster V.

         In his complaint on appeal, Stephen Eugster alleges that the WSBA, on November 3, 2015, sent him a letter informing him that disciplinary counsel intended to request a Disciplinary Board review committee to order review of Cheryl Rampley's complaint by a hearing officer. According to Eugster, the WSBA letter contained false statements concerning his conduct and failed to inform the Disciplinary Board of conflicting material statements. When Stephen Eugster filed this appeal, the WSBA had yet to commence formal disciplinary action against Eugster as a result of Cheryl Rampley's grievance.

         PROCEDURE

         On November 9, 2015, Stephen Eugster initiated this lawsuit, Eugster VI, in state superior court, against the WSBA and three WSBA officials, Executive Director Paula Littlewood, Director of Office of Disciplinary Counsel Douglas Ende, and disciplinary counsel Francesca D'Angelo. Eugster alleges that the superior court has jurisdiction of Eugster VI under 42 U.S.C. § 1983, Washington Constitution article IV, section 6, RCW 2.08.010, and chapter 7.24 RCW. The WSBA and its officials raise the same defenses and arguments. Therefore, we will collectively refer to the defendants as the WSBA. Because of the extensive and complicated claims and requests for relief asserted by Stephen Eugster, we supply many details of Eugster's causes of action and demands for relief.

         Stephen Eugster's superior court complaint thoroughly outlines the structure and function of the WSBA and its disciplinary process. Eugster contends that the organizational structure creates inherent conflicts. According to Eugster, the WSBA's duties include advocating for him, yet it seeks to discipline him. Supreme Court members help to choose WSBA officials, and WSBA officials provide recommendations for appointments to the Supreme Court. WSBA officials vet disciplinary hearing officers and members of the WSBA Disciplinary Board, and then the hearing officers and Disciplinary Board review disciplinary grievances filed by the WSBA. Eugster complains that the WSBA principally handles grievances lodged against sole practitioners or members of small law firms. Hearing officers vary significantly in competence and some officers violate the rights of the accused lawyers. The Washington Rules of Professional Conduct (RPC) violate procedural due process because in many instances the rules do not define what is permitted and not permitted. The Supreme Court unlawfully defers to decisions of the Disciplinary Board. In his complaint, Stephen Eugster alleges that the conduct of the Disciplinary Board lacks impartiality. He complains that the WSBA vets all members of the board before each member's appointment.

         In the complaint in Eugster VI, Stephen Eugster alleges deprivation of his civil rights, intentional infliction of emotional distress, and negligence. Eugster identifies the civil rights violations as deprivation of procedural due process, both state and federal. He also claims that the WSBA unconstitutionally employed the discipline system to retaliate against him for bringing a federal lawsuit against it, and, thus, the WSBA violates his federal First Amendment rights. Finally, Eugster contends that the disciplinary system denies him of his right to petition the government for redress of violations of his state and United States constitutional rights. Eugster seeks a declaration that the WSBA disciplinary system is unconstitutional, an injunction against the WSBA disciplining him, damages, punitive damages, and reasonable attorney fees and costs.

         On December 23, 2015, Stephen Eugster filed a motion for voluntary dismissal of his complaint pursuant to CR 41(a)(1)(B). Presumably, the trial court never addressed the motion.

         On January 22, 2016, the WSBA filed a motion, pursuant to CR 12(b), to dismiss Stephen Eugster's complaint. In the motion, WSBA argued that the superior court lacked jurisdiction, Eugster's claims are not justiciable because he lacks standing and the claims are not ripe, Eugster failed to state a claim on which relief can be granted, res judicata bars the claims, and the WSBA enjoys immunity.

         On February 3, 2016, Stephen Eugster filed an amended complaint for declaratory judgment, injunction, and damages. The amended complaint repeated the description of Washington State's integrated bar association and the alleged constitutional defects of the structure and processes of the bar and its disciplinary system. The amendment removed Eugster's intentional infliction of emotional distress claim, but reserved his negligence claim. A section of the amended complaint reads:

This action seeks damages from Defendants for negligence as a result of Defendants['] use of the Washington Lawyer Discipline System as applied to Plaintiff as retaliation against Plaintiff for bringing an action in Federal Court to asserting that Plaintiffs compelled membership and that such actions violates Eugster's right of petition of the government for a redress of grievances under the First and Fourteenth Amendment Rights to the United States Constitution, and Washington State Constitution Art. 1, Section 4.

         CP at 86-87 (emphasis added). The word "negligence" fits awkwardly in this paragraph, and we question if Stephen Eugster meant to allege a claim under common law negligence.

         The gist of the amended complaint lies in its introduction:

This case concerns the civil rights of Plaintiff protected by 42 U.S.C. § 1983, the First and Fifth Amendments to the United States Constitution, and Washington State Constitution Art. I, Section 1 and Section 2. Plaintiff seeks declaratory judgments by the court declaring the WSB A Washington Lawyer Discipline System unconstitutional because (1) the Discipline System does not pass strict scrutiny and because (2) the Discipline System violates a lawyer's right to due process of law.
Eugster seeks an injunction enjoining the Defendants or some of them, from application of the WSB A Washington Lawyer Discipline System to him, and in furtherance of the court's determinations that the Discipline System is unconstitutional.
As to the foregoing, Eugster does not seek damages, or monetary relief from Defendants or any of them.
However, Plaintiff does seek damages from some or all of the Defendants for compensatory or nominal damages under 42 U.S.C. § 1983 for injuries to Plaintiff as a result of violations of Plaintiff s rights by Defendants or some of them under 42 U.S.C. § 1983 concerning the use by Defendants or some of them of the Discipline System to intimidate, harass and retaliate against Plaintiff for bringing an action in United States District Court, Western District of Washington in which Plaintiff asserts that under First and Fourteenth Amendments and 42 U.S.C. § 1983 his fundamental right not to associate with the WSB A is violated.

CP at 85. The amended complaint's prayer seeks the same relief as sought in the first complaint.

         The trial court dismissed all claims of Stephen Eugster with prejudice. The court dismissed all claims for damages based on GR 12.3's grant of immunity to the WSBA and its employees. The court dismissed all constitutional claims and claims for declaratory judgment for lack of subject matter jurisdiction. The court ruled that the Washington Supreme Court, under Rules for Enforcement of Lawyer Conduct (ELC) 2.1, possessed exclusive jurisdiction over the lawyer discipline system. The trial court reasoned that Eugster could have litigated his constitutional arguments before the state Supreme Court during his earlier discipline proceeding. Stephen Eugster appeals.

         On September 23, 2016, after filing his opening and reply brief in this appeal, Stephen Eugster filed a statement of additional authorities. This court rejected the filing because of the statement's noncompliance with RAP 10.8. The additional authorities constituted copies of pleadings from the WSBA Office of Disciplinary Counsel's complaint against Eugster in Eugster IV for his conduct with regard to Verdelle O'Neill, including a formal complaint filed on June 16, 2016, after Eugster commenced this suit. RAP 10.8 serves to allow parties an opportunity to cite case authority decided after the completion of briefing. O'Neill v. City of Shoreline, 183 Wn.App. 15, 23, 332 P.3d 1099 (2014). The rule does not grant permission to file additional documents.

         This court scheduled the decisional conference of the reviewing panel for December 6, 2016. On December 14, 2016, Stephen Eugster filed a motion requesting that this court take judicial notice of documents, and he attached the same documents to his motion that he sought to bring to this court's attention by his statement of additional authorities. The documents include the WSBA's June 16, 2016 formal complaint in Eugster IV concerning Eugster's conduct toward Verdelle O'Neill; Eugster's answer, affirmative defenses, counterclaims and third-party claims; the WSBA's motion to strike Eugster's counterclaims and third-party complaint; Eugster's response to the WSBA's motion to strike; order on motion to strike; and discovery pleadings. In the order on motion to strike, the WSBA hearing examiner dismissed affirmative defenses, counterclaims, and third-party claims asserted by Eugster on the basis of alleged due process rights deprivations.

         On January 9, 2017, Stephen Eugster filed with this court a second motion requesting that this court take judicial notice. Eugster's motion contends that the WSBA ended and a new association was born during the WSBA Board of Governors meeting, on September 29-30, 2016, when the board added limited practice officers and limited license legal technicians as members to the ...


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