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In the Matter of the

April 20, 2011

IN THE MATTER OF THE DISCIPLINE OF LANCE RUSSELL, AS AN ATTORNEY AT LAW.


The opinion of the court was delivered by: Severson, Justice

#25490-GAS

ORIGINAL PROCEEDING

ARGUED JANUARY 10, 2011

[¶1.] This is a disciplinary proceeding against Lance Russell, a member of the State Bar of South Dakota. The Disciplinary Board of the State Bar recommended that Russell be publicly censured. The Referee, Retired Justice Robert A. Miller, also recommended a public censure. In his brief in response to the Referee's findings of fact, conclusions of law, and recommendation, Russell asks this Court to dismiss the Board's and the Referee's recommendation. At oral argument, however, Russell's counsel told the Court that a "private censure" with conditions imposed to ensure that the conduct resulting in these proceedings does not reoccur would be appropriate.*fn1

GENERAL BACKGROUND

[¶2.] Russell graduated from the University of South Dakota School of Law in 1999. He passed the South Dakota bar examination and was admitted to practice law on January 10, 2000.

[¶3.] After graduating from law school, Russell clerked for the circuit court in Deadwood, South Dakota for a year. He then entered the private practice of law in Hot Springs, South Dakota. In 2000 he was elected State's Attorney for Fall River County. Russell was reelected in 2004. In 2008 Russell chose not to seek a third term. Instead, he ran for and was elected to the South Dakota Legislature, representing District 30 in the House of Representatives. Russell was reelected to this position in 2010.

[¶4.] During the pendency of this disciplinary proceeding, the only one ever filed against him, Russell completed a LL.M. program in environmental law at the University of Denver. While Russell told the Disciplinary Board that he would like to practice in some capacity in the areas of environmental law and natural resources law, he told this Court that his plans are uncertain until this disciplinary matter is resolved.

[¶5.] The focus of this disciplinary proceeding was two-fold. First it examined Russell's use of the grand jury to investigate a controversial golf course expansion project in Hot Springs and Russell's release of the grand jury transcript to the public. Second, it examined Russell's issuance of a press release criticizing and blaming Judge Jeff Davis for the trial delay in the homicide case of State v. Fast Horse .

GRAND JURY

[¶6.] In 2002 the Common Council of Hot Springs entered an agreement with Steve and Carla Simunek for the construction of an additional nine holes to the Hot Springs golf course.*fn2 The project was fraught with controversy and divided the community and Common Council.

[¶7.] In November 2006, Russell was approached by a number of people including Steven Schjodt, a civil engineer for the Army Corps of Engineers and a contributor to Russell's campaigns, and asked to draft a petition to recall Hot Springs Mayor Carl Oberlitner for misconduct, malfeasance, corruption, oppression, and gross partiality in the sale of the Carnegie Library and the development of the new nine holes to the municipal golf course. Russell asked for Schjodt's input in drafting the petition and Schjodt suggested revisions.

[¶8.] By 2007 the South Dakota Department of Legislative Audit had completed an investigation of the golf course project at the direction of the Attorney General's office. No criminal action resulted. The Department of Revenue was in the midst of auditing the records of the project's general contractor, and the city of Hot Springs was in litigation with the general contractor concerning the cost of the project and sufficiency of the work performed.

[¶9.] Russell was aware of the investigation, audit, and civil litigation when a city councilman, Don Patitz, and Schjodt met with Russell and expressed their dissatisfaction with Mayor Oberlitner's handling of the golf course issue and what they believed were billing irregularities by the Simuneks. Patitz and Schjodt were not satisfied with the other investigations and were adamant that Mayor Oberlitner and the Simuneks needed to be punished.

[¶10.] Due in large measure to Patitz's and Schjodt's urging, Russell applied for and received an order calling a grand jury to convene on July 27, 2007, primarily to investigate the golf course project. At that time, Russell was in his second term as State's Attorney and seventh year as a prosecutor.

[¶11.] During the course of the grand jury proceedings Schjodt testified twice. Because of Schjodt's background in dealing with federal construction projects and his knowledge of construction costs and taxes, Russell considered Schjodt to be "my expert essentially."*fn3

[¶12.] Throughout the grand jury proceedings Russell regularly consulted with Schjodt. Schjodt provided Russell with his personal and professional opinions regarding the scope and quality of the contractor's work on the golf course. Schjodt also provided Russell with suggestions as to witnesses, and grand jury strategy. Further, Schjodt encouraged Russell to continue the investigation as a means to enhance Russell's reputation. The Referee found that the extensive communication between Schjodt and Russell demonstrated "that Schjodt arguably influenced the direction of the grand jury proceedings." Russell admitted that he gave Schjodt information from the grand jury proceedings. Schjodt shared some of this information, by unsigned letter, with a citizen who did not agree with his viewpoint.

[¶13.] While the grand jury was impaneled and continuing its investigation of the golf course project, Judge Davis, the presiding judge in the Seventh Circuit, began to hear rumors "that what was taking place in the Grand Jury was known on the street." Because of his concern for the integrity of the grand jury process and the secrecy of it, Judge Davis drove to Hot Springs in April 2008 to meet with Russell. Judge Davis told Russell:

You've abused your authority as a State's Attorney. There are things on the street that should not be there out of the Grand Jury process. I don't know what all you've got going. You've got 30 days to wrap it up because I am pulling your Grand Jury on you.

[¶14.] On May 20, 2008, the grand jury indicted the golf course contractor, Steven Simunek, and his wife, Carla, as co-defendants. The Simuneks were charged with seven Class 6 felonies,*fn4 two Class 5 felonies,*fn5 and seven Class 1 misdemeanors.*fn6 Mayor Oberlitner was charged with one Class 2 misdemeanor.*fn7

[¶15.] The defendants retained experienced counsel who began discovery and discussed the cases with Russell. Schjodt continued to advise and consult with Russell and Russell intended to use Schjodt as an expert at trial. Inexplicably, Russell did not consider Schjodt's written documents or his involvement in the proceedings to be exculpatory as impeachment evidence affecting witness credibility and did not disclose these matters to the defense.*fn8

[¶16.] After consulting Schjodt, on August 18, 2008, Russell offered to settle the charges against Steven Simunek (Simunek) on the following terms:

A. That Simunek plead guilty to any four counts of his choosing;

B. The remainder of the charges would be dismissed;

C. Upon Simunek's plea, the State would dismiss all charges against his spouse;

D. The State would not resist a request for a suspended imposition of sentence;

E. The entire grand jury proceedings leading to the indictment of Mr. and Mrs. Simunek including the transcripts and exhibits will be unsealed and filed in the criminal case;

F. The defendants would to the satisfaction of the Department of Revenue, file or refile sales, use and excise tax returns; and,

G. The State and defendant reserve the right to aggravate/mitigate at the time of sentencing.

(Emphasis added.) [¶17.] Russell also offered to settle the charges against Mayor Oberlitner on the following terms:

A. That the defendant waive any and all rights to a speedy trial;

B. That the defendant obey all laws, etc.;

C. That the defendant write a letter of apology to the citizens of Hot Springs which must be approved by [Russell] prior to the offer becoming binding with a publication date in the Hot Springs Star after November 4, 2008;

D. That the defendant agree that the entire grand jury proceedings leading to the indictment of defendants Steven and Carla Simunek, including the transcripts and exhibits, will ...


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