Arizona Supreme Court holds that a charge filed with the State Bar of Arizona may serve as the predicate “civil proceeding” for a wrongful institution of civil proceedings claim, and that Rules 48(l) and 80(a)(6) absolutely privilege a complainant’s statements to the State Bar without immunizing the complainant from suit for the act of filing the charge.

Anyone may file a charge with the State Bar of Arizona alleging unprofessional conduct by a lawyer or the unauthorized practice of law. Rules 48(l) and 80(a)(6) of the Rules of the Supreme Court provide that communications to the State Bar and testimony in the proceedings are “absolutely privileged conduct,” barring any “civil action predicated thereon” against a complainant or witness. Each rule then lists participants—board members, bar counsel, investigators, and staff among them—who are immune from suit. To state a claim for wrongful institution of civil proceedings (“WICP”), a plaintiff must allege that the defendant (1) instituted a civil proceeding that was (2) motivated by malice and (3) begun or maintained without probable cause, (4) terminated in the plaintiff’s favor, and (5) damaged the plaintiff.

Clark Wu and his firm, BB Group, LLC, represented the plaintiffs in a 2021 Maricopa County action over ownership interests in Tree House Labs, LLC; John Accursio, admitted in New York and Washington, D.C., represented the defendants with two Arizona co-counsel. After Accursio told Wu that BB Group’s representation appeared to present a conflict of interest, and later revised a draft agreement Wu had circulated as a condition of producing records, Wu accused him of the unauthorized practice of law. Accursio invoked Ethical Rule 5.5(c)(1), which permits temporary practice in association with Arizona counsel.

Accursio filed a charge against Wu with the State Bar and told Wu he had done so. Immediately thereafter, Wu filed a charge against Accursio alleging the unauthorized practice of law. Senior Bar Counsel opened a screening investigation under Rule 55(b); Accursio responded and obtained a protective order sealing sensitive material. While the charge was pending, a New York firm rescinded an employment offer, and it did not reinstate the offer after the State Bar dismissed the charge.

Accursio sued Wu for WICP, and BB Group and another of its lawyers for aiding and abetting. The trial court dismissed both claims under Rule 12(b)(6), reasoning under Goldman v. Sahl, 248 Ariz. 512 (App. 2020), that the State Bar had screened and dismissed the charge before instituting a proceeding. The court of appeals vacated the dismissal, and the Supreme Court granted review.

The Court held that a charge filed with the State Bar may serve as the predicate “civil proceeding.” The proceedings such a charge sets in motion, the Court emphasized, “are not mere informal inquiries”: even before a complaint is filed, a charge may compel the respondent to produce information and documents; may generate investigative subpoenas and contempt proceedings; and may end in a consent agreement imposing discipline or restitution. Those features “bear several hallmarks of a lawsuit filed by a plaintiff against a defendant.” The Court treated Goldman’s contrary remark as dicta because it did not involve a WICP claim.

Rule 48(a)’s declaration that “[d]iscipline and disability proceedings are neither civil nor criminal, but are sui generis” did not foreclose that conclusion. Read with the rest of Rule 48, subsection (a) simply reflects that such proceedings are unique in specified respects.

On the second issue, the Court held that Rules 48(l) and 80(a)(6) confer a privilege, not an immunity, on complainants and witnesses. The rules privilege “[c]ommunications to the . . . state bar” and “testimony given in the proceedings”; neither refers to the act of filing a charge. The first sentence of each rule extends a “privilege” to complainants; the second extends an “immunity,” but only to other participants, not to complainants. Had the Court meant to immunize filing, it would have said so, as Texas has.

A WICP claim resting exclusively on privileged statements is therefore barred. But a plaintiff may proceed on non-privileged evidence—the fact and timing of the filing, what the complainant knew beforehand, and his motivation. Accursio alleged enough such facts, including that Wu knew he was working with local counsel and filed the charge immediately after learning of Accursio’s own charge. Whether he can prove the claim without privileged communications “may be a heavy lift,” the Court observed, but that was for remand.

The Court also ruled that the time at which the civil proceeding commences depends on the nature of the charge. Where a charge alleges that an Arizona lawyer violated the Ethical Rules, it commences under Rule 55 when the respondent receives written notice of a screening investigation and must respond. Where a charge alleges the unauthorized practice of law, Rule 78(a) provides that it “commences upon receipt by the state bar of a charge against a respondent.” The record left unclear which rule applied, but the Court found a proceeding had commenced either way.

Addressing the concern that exposing complainants to suit could chill reports of lawyer misconduct, the Court observed that a WICP claim cannot rest on a charge that is merely imprudent, mistaken, or even incorrect. The Court reversed the dismissal and remanded, vacating the court of appeals’ memorandum decision.

Justice Montgomery, joined by Justice Cruz, dissented. Tracing Rule 48(l) to the 1984 amendments to Part V of the Rules, the dissent would have held that the rule’s original public meaning protects a complainant from any suit predicated on filing a bar charge, and that Rule 48(a) forecloses treating a discipline proceeding as a civil one.

Justice King authored the Court’s opinion, in which Chief Justice Timmer, Vice Chief Justice Lopez, and Justices Bolick and Beene joined. Justice Montgomery, joined by Justice Cruz, dissented.

Posted by: Andrew Haynes