ROANOKE TIMES
Copyright (c) 1996, Roanoke Times
DATE: Tuesday, September 24, 1996 TAG: 9609240065
SECTION: VIRGINIA PAGE: C-1 EDITION: METRO
SOURCE: JAN VERTEFEUILLE STAFF WRITER
If two lawyers are punished for filing a lawsuit accusing the Virginia Supreme Court and three law firms of conspiracy, there will be a "chilling effect" on other lawyers' willingness to take on the legal establishment, an attorney who's being sanctioned told a federal judge Monday.
But the firms that had been accused complained that Blacksburg developer Georgia Anne Snyder-Falkinham and her lawyers sued them simply to publicize a libelous, anonymous letter that contends Roanoke's second-largest law firm influenced state Supreme Court justices to cover up legal malpractice.
For a case that has generated unusually strong language in court papers filed earlier - prompting the plaintiffs to be sanctioned and one judge to recuse himself - the six-hour hearing Monday was relatively subdued.
Roanoke attorney Joseph Anthony - Snyder-Falkinham's counsel in the conspiracy suit - did choke up when he described on the stand the "devastating effect" the publicity of being sanctioned has had on him. The original judge referred to the lawsuit Anthony filed as "having all the grace and charm of a drive-by shooting."
"I consider this a worthy cause and an unpopular cause," Anthony testified. But, "I won't take another legal malpractice suit ever again. When the legal system cannot allow people who've been victimized to have their day in court - and for their attorneys, the messengers, to be victimized - it's not right."
A federal judge from North Carolina came to Roanoke Monday to decide how much Snyder-Falkinham and her attorneys should be sanctioned for filing what a Roanoke judge ruled was a frivolous suit.
U.S. District Judge Samuel Wilson said in an opinion last month that he planned to sanction them, then removed himself from the case after the attorneys questioned his integrity and accused him of protecting the lawyers being sued.
U.S. District Judge William Osteen, who normally sits in Greensboro, told the lawyers that he would not reconsider Wilson's decision that they be sanctioned, but that he would decide how much - if any - money they should have to pay. He did not rule Monday.
The lawyers and law firms that were sued asked that the developer and her lawyer not only be required to pay their attorneys fees, but to be sanctioned on top of that by having to pay double or triple the fees.
Lawyers have an obligation to ensure a client's claims are "well-grounded in fact" before filing suit, attorney Bill Eskridge told Osteen in arguing for severe sanctions.
"Mr. Anthony in particular doesn't seem to be the least bit apologetic, or cowed, for what he's done," said Eskridge, who represents Roanoke's second-largest law firm, Gentry Locke Rakes & Moore.
Anthony acknowledged that he had little to base the suit on, other than the anonymous letter and speculation it created about the rapport Gentry Locke partners have with Supreme Court justices.
Snyder-Falkinham's legal battle began when she sued her former attorney, Bruce Stockburger, a partner in Gentry Locke, for representing her in business dealings in which she charged he had conflicts of interest. She lost millions of dollars as a result, according to her suit.
The law firm agreed to a confidential settlement, which testimony at Monday's hearing indicated was more than $1 million, But she claimed she never agreed to the settlement.
She appealed all the way to the Virginia Supreme Court, which upheld the settlement. Snyder-Falkinham then turned to federal court, filing a lawsuit claiming that Gentry Locke lawyers conspired with Supreme Court justices to "corruptly" decide against her.
The suit asserts Gentry Locke and its partners, who are well-connected in the state's legal circles, used their influence to avoid the embarrassment of successful legal malpractice claims against the firm.
Much of the suit is based on an anonymous letter supposedly written by the "grateful wife" of a Gentry Locke lawyer, thanking the Supreme Court justices for their "intense and concerted effort" to protect the firm's reputation.
Osteen extensively questioned Anthony and his co-counsel, Michael Richardson of Tennessee, both of whom took the stand to detail all the research they did before filing suit.
Osteen noted that they Anthony and Richardson were making strong allegations, accusing judges of accepting bribes from friends at Gentry Locke to look the other way as a plaintiff was denied her civil rights.
"That's really what we're talking about - friendships can be bribes," he said.
Wilson speculated in his opinion dismissing the suit that someone on Snyder-Falkinham's side wrote the letter.
Anthony said he got two anonymous calls from someone he believes works at the Virginia Supreme Court alerting him of the letter's existence. Later, he said, he and his client found copies of it taped to the outside of their offices after Supreme Court personnel would not provide them copies.
After repeated inquiries, the seven justices acknowledged that they had each gotten a copy of the letter, but that all had thrown it in the trash as "incomprehensible."
"I'm in a state of disbelief that Supreme Court justices could get such a letter and do nothing about it," Richardson said.
Snyder-Falkinham, who also serves on the town planning commission, took the stand to deny writing the letter or directing anyone else do it.
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