California Bar Journal
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Venice civil rights attorney suspended 2nd time over fees
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STEPHEN YAGMAN, a Venice civil rights attorney and frequent critic of the Los Angeles police department, is suspended from practice for a year as a result of overcharging clients. The 53-year-old Yagman [#69737] also was ordered to make restitution to five clients totaling $20,289.33. The order took effect Oct. 16, 1998. The discipline marks the second time Yagman has been suspended for charging an unconscionable fee.

Yagman's troubles stemmed from his representation of five clients who sued the city of Los Angeles and individual police officers after four suspects were shot following a robbery of a McDonald's restaurant in 1982.

His clients included one surviving suspect and the heirs of those who were killed.

Yagman won a judgment of more than $44,000 and more than $8,000 in costs, although the actual costs exceeded $29,000. In add-ition, the court awarded him $378,175 in attorney's fees.

Because Yagman had a 45 percent contingency fee agreement with his clients, he deducted $19,800 the $44,489 jury award, leaving his clients with $810 each.

He did not advise the court of the contingency fee agreement before it awarded him attorney's fees.

His clients complained that he had been paid twice, but the district court judge said only that had he known about the contingency fee, he would have reduced the statutory fees by that amount. As a result, Yagman returned $20,000 to the city attorney. (The money later was returned to his attorney to be held in a trust account.)

The bar charged Yagman with collecting an unconscionable fee, asserting that federal law does not permit a civil rights plaintiffs attorney to collect both the contingent fee and the court-awarded fee. The State Bar Court's review department found that the fee agreement was illegal and that taking the contingency and statutory fees amounted to taking an unconscionable fee.

It also found that taking both fees amounted to moral turpitude.

"To put it more plainly," the court wrote, "he wrote a retainer agreement designed to avoid the effect of the supervision of the district court; in his application for fees, he knowingly failed to reveal that retainer agreement; and after being awarded what the court considered reasonable compensation for his services, he took the contingent fees on top of that reasonable compensation without disclosing that taking to the supervising court."

The court also found that Yagman failed to communicate a written settlement offer to his clients, promptly pay client funds to which the client is entitled, or render an accounting, and that he commingled and misappropriated funds.

In mitigation, the court found that Yagman demonstrated candor and accepted responsibility for his misconduct. It called Yagman "a remarkably able advocate who, on occasion, refuses to listen to or accept well-reasoned and considered advice from reliable sources when it conflicts with a position held by him."

Yagman had sought review before the Supreme Court, arguing that he did not get a fair hearing before the bar court's review department.

The high court, however, unanimously adopted the bar court's recommendation and placed Yagman on three years of probation with a one-year actual suspension and until he makes restitution to the five clients. If the suspension exceeds two years, he must prove his rehabili-tation. He also was ordered to take the MPRE and comply with rule 955 of the California Rules of Court by notifying all clients and interested parties of his