What were Martha Stewart’s lawyers thinking?

By Diane Karpman

Karpman

Martha Stewart elected to be incarcerated early, so that her release would allow her to plant her garden. She should be out soon. Her case demonstrates that government regulators, spending millions of dollars, will pursue the rich and famous. Surely her case will deter mammoth insurance brokers from receiving kickbacks from carriers and keep mutual fund managers from preferring some clients over others. Of course, corporations will no longer be forced to restate their earnings. Above and beyond all these salutary benefits, the case presents interesting lessons to be learned.

Martha was not convicted of insider trading, although there was a strong odor of insider trading throughout the case. She was convicted of obstruction of justice, because when she sat down with her lawyers and the government, she was less than candid. Her criminal acts occurred in the presence of her fancy New York lawyers. You have to wonder why they didn’t advise her to refuse to answer or to take the Fifth.

Then again, there had to be an offer before the drama of trial. How come her lawyers didn’t twist her arm and make her accept it? Clearly, this could have been a client control issue, since she appears to be a tough lady, but that is why you have a lawyer skilled in the art of persuasion. Once that critical meeting occurred with the prosecutors, why didn’t her lawyers advise her to fire them, retain new counsel and assert advice of counsel or lack of advice?

Poor Martha, sharing egg salad with her cellmates, cannot even maintain an action for legal malpractice. Criminal legal malpractice has elements not required in a typical civil legal malpractice action. In order for plaintiffs to recover for malpractice in criminal cases, they must prove actual innocence and obtain post-conviction relief. Criminals, if permitted to sue for malpractice, would be able to recover damages for illegal conduct.

The reason that a criminal is in jail is a direct consequence of his or her own conduct, not the lawyer’s. Therefore, meeting the causation requirement is also problematic. Wiley v. County of San Diego (1998) 19 Cal. 4th 532. Martha’s dream team had no downside in coercing, if necessary, appropriate client conduct, in demanding that she accept the plea bargain or in demanding that she tell the truth.

Remember, they didn’t get her because of the whiff of insider trading. Then again, Al Capone was convicted of tax evasion, not murder, and Bill Clinton surrendered his license for his deposition testimony, not Whitewater or Monica.

Martha has always made me feel inadequate. Let’s hope that she

doesn’t focus her prodigious attention on pleading formats or anything else in the legal arena. Personally, the Hermes bag was interesting, but my shopper’s heart missed a beat when I saw the chinchilla scarf that she wore to court, post verdict.

• Ethics expert Diane Karpman can be reached at 310/887-3900 or at karpethics@aol.com.