By Lyle Moran
Joseph L. Dunn has successfully revived his retaliation lawsuit against the embattled State Bar over his termination as executive director.
JAMS Arbitrator Edward A. Infante ruled Friday that three of Dunn's four remaining causes of action could proceed past motions to dismiss, and he kept all three defendants in the case.
The suit also names former bar President Craig Holden and Beth Jay, former principal counsel to California Chief Justice Tani G. Cantil-Sakauye.
In early April, Infante had dismissed Dunn's suit with leave to amend four of five causes of action.
Dunn, represented by Los Angeles attorney Mark Geragos, filed an amended notice of claims last month. Geragos said he looked forward to the case advancing to a hearing in August and called Infante's order gratifying on multiple levels.
"Number one, it vindicates Joe by showing that he does have valid causes of actions against Holden, Jay and the State Bar," Geragos said Friday. "It also just shows how out of touch the State Bar was when they were declaring victory two months ago."
The bar said after Infante's previous ruling it was pleased he agreed that there was no legal basis for Dunn's lawsuit, and Bar President David Pasternak said he was hopeful the ruling would bring an end "to this disruptive litigation."
Hueston Hennigan LLP of Los Angeles represents the bar and Holden.
Moez Kaba, a Hueston Hennigan partner, noted that at the motion to dismiss stage "all of Mr. Dunn's allegations have to be accepted as true, whether or not they are in fact true."
He also highlighted that Infante dismissed without leave to amend Dunn's breach of fiduciary duty cause of action against the bar.
"With respect to Mr. Dunn's other claims, when the facts are presented to the arbitrator, either at summary judgment or trial, we are confident that the bar and Mr. Holden will succeed," Kaba wrote in an email.
Pasternak said he too was confident the bar will prevail "when all of the facts are made known through the discovery process."
"We thank the arbitrator for his thoughtful engagement," Pasternak said in a prepared statement. "In the meantime, we will continue focusing our efforts and energies on public protection."
Robert Naeve, Jay's Irvine-based attorney at Jones Day, was unable to provide a comment Friday afternoon.
The bar and Holden have argued that Dunn failed to engage in protected whistleblower activity and he was fired because an investigation by Los Angeles-based Munger, Tolles & Olson LLP determined he committed "gross misconduct, repeated acts of dishonesty, and financial improprieties."
Dunn has alleged his 2014 firing was retaliation for whistleblowing about then-Chief Trial Counsel Jayne Kim's alleged improper removal of cases from the backlog of attorney discipline complaints and the bar's alleged failure to enforce a law aimed at preventing unauthorized practice of law by so-called "notarios." Dunn v. State Bar, BC563715 (L.A. Super. Ct., filed Nov. 13, 2014).
Dunn, a former state senator who unsuccessfully ran this year to represent an Orange County district in Congress, also complained about the bar hiring Munger Tolles to investigate him at what he called an exorbitant expense to attorney members. The bar paid Munger Tolles $358,559, the Daily Journal previously reported.
In initially dismissing Dunn's whistleblower liability and retaliation cause of action with leave to amend, San Francisco-based Infante wrote: "Claimant fails to allege, however, that these actions caused him to reasonably believe that a specific law had been violated. This failure is fatal."
In his amended notice of claims, Dunn said at the time he reported the alleged wrongful conduct, he believed it may have violated specific provisions of law.
Among the laws he believes may have been violated were:
*California Business and Professions Code section 6106, which says an act involving moral turpitude, dishonesty or corruption constitutes cause for an attorney's disbarment or suspension.
*California Business and Professions Code section 6068(a), which outlines an attorney's duty to support federal and state law.
In his new order, Infante ruled that Dunn's allegations against Kim were sufficient to support a belief she violated the law. The bar has previously called Dunn's allegations, including those against Kim, baseless.
Dunn also successfully revived his intentional interference with contractual relations cause of action against Holden and Jay, who he alleges both worked to get the bar's board to terminate him. His breach of the implied covenant of good faith and fair dealing cause of action against the bar will proceed as well.
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