Three-year suspension recommended for high-profile San Francisco lawyer

In an unusually scathing opinion, a State Bar Court judge recommended that high profile San Francisco attorney Philip Kay be suspended for three years, citing his “rude and disrespectful conduct” during three trials as well as false accusations, frivolous motions and unrelenting bad behavior. The suspension will take effect if the Supreme Court signs off.

Kay, who is well-known for his successful sexual harassment lawsuits, including a 1994 case in which a legal secretary won a $6.9 million jury verdict against a Palo Alto attorney, was charged by the State Bar with 19 counts of misconduct.

Judge Lucy Armendariz found him guilty of 16 counts, including charges of misleading the court, improper contact with jurors, splitting fees with a non-lawyer and committing acts of moral turpitude. But she reserved her most caustic comments for what she called Kay’s “insolent behavior.”

“Somewhere during his overzealous advocacy, he lost it,” Armendariz wrote in a 48-page ruling, “… not the cases, but his integrity, professional decorum, credibility and respect of the court.”

Kay, 56, said during his lengthy trial last spring that he expected to be disbarred. In an e-mail message, he accused bar prosecutors of lying about what various courts had ruled in opinions and orders regarding the cases in question. The suspension was recommended because “I asserted constitutional and statutory rights of attorney client privilege and work product before answering questions,” he added.

Most of the misconduct charges stemmed from two cases, a 1998 sexual harassment trial and 2002 retrial against Ralphs Grocery Stores and a sexual harassment trial against Ultrastar Cinemas in 2005. Kay’s clients won jury verdicts of $30 million in the Ralphs litigation and nearly $7 million in the Ultrastar case.

But throughout both trials, Armendariz said, Kay made gratuitous comments and offensive statements, was disruptive, repeatedly asked identical, almost identical or inadmissible questions despite the court’s warnings, and argued with the court. He was sarcastic or snide to witnesses, the judge said, badgering, berating or yelling at them. He made personal attacks on opposing counsel, including telling one jury that the other attorney lied, was unprofessional and violated ethical duties and court orders, Armendariz said. And he made false accusations against the courts, charging the judges were biased, unfair and intellectually dishonest and they committed judicial misconduct and distorted the record.

All these statements, the judge wrote, caused trial delays, interfered with the proceedings and “were made with the intent to deprive the defendant” of a fair trial and to appeal to the jury’s passion and prejudice.

At the conclusion of the first Ralphs trial, the court granted a mistrial based on juror misconduct. Ralphs also moved for a mistrial based on attorney misconduct, leading Judge Joan Weber to say, “I found Mr. Kay’s conduct throughout the case to be exceedingly unprofessional.” In particular, she cited Kay’s accusations that his opposing counsel committed perjury and violated her oath as an officer of the court. “I have never heard an attorney make such outrageous allegations in a closing argument against opposing counsel,” Weber wrote. “It sickened me to hear it.”

Following a second trial, the court granted a third trial on punitive damages, finding that the jury’s award was inflated due in large part to Kay’s misconduct.

After the jury in the Ultrastar matter awarded $6.85 million to Kay’s clients, Ultrastar moved for a new trial, arguing among other things that Kay’s misconduct unfairly prejudiced the defendants and necessitated a new trial. When a new trial was granted, the court included a tentative ruling that stated, “The jury’s excessive awards may be explained by Attorney Kay’s overall conduct.” (The case is currently awaiting another trial.)

Kay said the judges in the two cases claimed misconduct only after they were “reversed on appeal and disqualified … OR they lied in their testimony in the State Bar trial.

“This will create an uncertain and chilling effect by allowing unfit and disgruntled judges to lie about the record and impugn lawfully obtained civil rights verdicts, which have been upheld by the Court of Appeal and Supreme Court.”

Armendariz found that Kay failed to obey court orders, maintain respect to the courts, sought to mislead the jury and committed several acts of moral turpitude. His behavior wasted court time, delayed clients’ rights to receive their judgment awards and made the operation of the justice system “more burdensome,” the judge said.

She noted that the “unrestrained personal abuse and disruptive behavior that characterized (Kay’s) conduct in the underlying court proceedings” was repeated during his trial before the bar. After 11 days, his default was entered when he refused to take the witness stand, Armendariz said, and she ticked off a list of 15 behavioral sins she said Kay committed during the bar court trial.

Although the State Bar asked that Kay be disbarred, Armendariz said such a punishment would be unduly harsh. Kay did not engage in intentional deceit or commit fraud against his clients, nor did he breach his duty of loyalty. “In fact,” Armendariz wrote, “he zealously litigated several sexual harassment lawsuits and won; but he had also caused collateral damage to himself, to the administration of justice and to his clients without recognition of any wrongdoing.”

Allen Blumenthal, who prosecuted the case for the State Bar, said his office “is pleased that the court agreed with us about Mr. Kay’s unprofessional conduct. We believe this shows that attorneys, no matter how famous or successful, are going to be held accountable for their in-trial conduct and their obstruction to the orderly administration of justice.”

Blumenthal said his office has not yet decided whether to appeal and seek Kay’s disbarment.