Bernstein v. State of New York, 06 Civ. 5681
Decided: February 6, 2007

"Disciplinary proceedings were instituted against Bernstein by the Grievance Committee for the Second and Eleventh Judicial Districts. The petition contained three charges of professional misconduct, including a charge that Bernstein "converted clients [sic] funds that were entrusted to him as a fiduciary, in violation of Code of Professional Responsibility DR 9-102(a) and DR 1-102 (a)(3) and (7) (22 NYCRR 1200.46 [a]; 1200.3 [a] , )." The Appellate Division, Second Department, ordered that the matter be referred to a Special Referee for a hearing and report. Following a hearing, the Special Referee sustained all of the charges. The Grievance Committee then moved to confirm the Special Referee’s Report, a motion that Bernstein opposed. In its decision confirming the Special Referee’s Report, the Second Department made the following findings:

On or about July 1, 1999, Dr. Alexander Hollander, a dentist, was arrested pursuant to a 36-count criminal indictment charging him with grand larceny in the third degree (two counts), scheme to defraud in the first degree, offering a false instrument for filing in the first degree (27 counts), falsifying business records in the first degree (three counts), and perjury in the first degree (three counts). The respondent [Bernstein] represented Dr. Hollander at his arraignment, and bail was set at $50,000. Also on July 1, 1999, the respondent received $4,400 in cash on behalf of Dr. Hollander for bail. The respondent failed to apply those funds towards Dr. Hollander’s bail and failed to return the money to Dr. Hollander or his representative upon demand. Instead, he converted the $4,400 to his own use and benefit.

The Second Department sustained the charge of conversion and ordered that "pursuant to Judiciary Law §90, effective immediately, the respondent, Joshua Bernstein, is disbarred, and his name is stricken from the roll of attorneys."

The Court of Appeals dismissed Bernstein’s appeal of his disbarment. Bernstein then made "a combined motion in the Appellate Division for reargument and, in the event of affirmance, for leave to appeal. Same were summarily denied, without Opinion." Bernstein also made "an appeal ‘as of right’ to the Court of Appeals" which was "dismissed on the basis that no criterium [sic] for an ‘as of right’ appeal was met."

In his opposition to the motion to confirm the Referee’s Report, Bernstein argued that he had a right to a retaining lien on the $4,400 that was to be used for Dr. Hollander’s bail "pursuant to an express oral retainer agreement made in open Court between the Plaintiff and said client at the latter’s arraignment therein, in the presence of the prosecutor thereon, upon which retainer agreement, with respect to fees to be paid to the Plaintiff, the client defaulted." Bernstein also "brought to the Appellate Division’s attention the fact that a provision in the Lawyer’s Code of Professional Responsibility explicitly provides that it is NOT a violation thereof for an attorney to act pursuant to a ‘recognized lien’." However, the Second Department concluded that "[t]he respondent presented no mitigating circumstances at the hearing," and that "the fact remains that [Bernstein] allowed his client to remain in prison while he converted to his own use money that was supposed to be used for bail."

Bernstein’s allegations of due process violations, and his position that the Rooker-Feldman doctrine does not bar this Court’s exercise of subject matter jurisdiction, are both based on his conclusion that the New York State court proceedings did not constitute "judicial proceedings" and, as such, could neither legally deprive him of his property by disbarment, nor present an obstacle to this Court’s exercise of jurisdiction. "